Burford’s ‘Timing’ Loss Shows Litigation Funders Need Patience

Burford Capital’s $72 million annual loss—the first in its history—shows the risk litigation funders face in growing their caseloads while the Covid-19 pandemic slowed court dockets, delaying payoffs for investors.

Burford last year invested $447 million in cases, about twice the $225 million it deployed in 2020, the company said in its annual report this week. But with fewer cases being decided through trials and settlements, payoffs from those investments—and others made in prior years—weren’t realized.

The impact of Covid on litigation, and thus on litigation finance investments, “has really been extreme,” said Matthew L. Schwartz, a managing partner with ...