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The Lawyer reports on Burford's record-setting 2017 annual results

Litigation funder Burford Capital saw triple-figure increases in both investment income and post-tax profits, generating a record $341m (£244.5m) total income last year.

The 2017 figure was up 109 per cent on the previous year when Burford posted $163m (£116.9m) in income. Post-tax profits at the company posted an even greater increase of 130 per cent, rising from $115m (£82.5m) to $265m (£190m).

Burford also saw a 57.4 per cent increase in cash generation up from $230m (£164.9m) to $362m (£259.5m) last year.

The funder’s overall income is made up of investment income, investment management income, insurance income, new initiatives income and other income.

Investment income was the funder’s primary revenue stream, rising 127 per cent from $140.2m (£100.4m) the previous year to $318.2m (£228.1m) in 2017. Investment management, insurance and new initiatives combined to provide the rest of the firm’s income with other income posting a $3.2m (£2.3m) loss.

Since launching in 2009, Burford has increased its total number of commitments from three that year to 29 in 2017. Last year, it didn’t conclude any of those 29 matters it opened with only one being ‘partially realised’ and the other 28 still ongoing. Burford’s income was largely generated by closing matters from previous years.

However, the value of those commitments has risen by 5,967.8 per cent in the eight years since its launch, growing from $11.5m (£8.2m) in 2009 to $697.8m (£500.3m) last year.

A notable evolution at the company is its shift away from single-case funding which, in 2009, represented 100 per cent of its business. Last year, single-case funding was at its lowest-ever level for Burford, contributing to just 5 per cent of new investments.

Speaking to The Lawyer, Burford Capital CEO Chris Bogart said that, while this was a record low for single-case financing, it had been decreasing for several years on a relevant basis. However, it still contributed roughly $75m to Burford’s overall income.

Bogart said: “The reason for this dynamic in the business is that single-case litigation finance is expensive. That’s because single-cases come with a significant risk of loss, so when you lose a single-case investment, you lose everything. The dynamic to overcome that is to bundle a bunch of cases together.

“I think this has been a natural evolution in the business. That being said, there will always be a single-case finance business at Burford.”

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