© By Diliff - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=22456897
Litigation funder Burford Capital reported investment commitments of $1.3 billion over the course of 2017, triple their 2016 total.
Third-party funder Burford Capital’s investments over the past year have covered a varied range of financing sources, and funds were deployed from both the publicly traded funder’s balance sheet and from managed funds and other vehicles. Across these two categories, 54% of new investments came in the form of portfolio litigation finance deals, while the more traditional single-case financing made up just 5% of balance sheet commitments and 6% of managed fund and other vehicle commitments.
Insiders have viewed this information as reflective of a trend which sees funders favor larger batches of litigation, rather than simply dealing with one case at a time. However, this is not to say that single-case financing is not still of interest to third-party funders. Burford invested $72.7m in this form of financing in 2017.
Other forms of investment made by Burford over the course of the past year included recourse finance, claims in which Burford could not lose their investment even in the case of it going bust (33% of balance sheet commitments and 38% of managed fund and other vehicle commitments) and also legal risk management, deals in which Burford does not expect to deploy capital (8% of balance sheet commitments and 2% of managed fund and other vehicle commitments).
The funding increase exhibited by Burford does not look set to slow as we enter 2018. Research from BTI Consulting shows that large companies are preparing themselves to spend more on litigation and top CLOs expect the new year to bring another 10% increase in litigation matters.