Burford Capital Limited (BUR): history, ownership, mission, how it works & makes money

A Brief History of Burford Capital Limited (BUR)

Foundation and Early Years

Burford Capital Limited was founded in 2009 by Christopher Bogart, a former lawyer at the firm Weil, Gotshal & Manges. The company specializes in litigation finance, providing capital to law firms and clients involved in legal disputes. In its initial years, Burford focused on developing its business model and expanding its client base.

Initial Public Offering

In 2014, Burford Capital went public on the London Stock Exchange under the ticker symbol BUR. The IPO raised approximately £100 million, which was used to fund its growing portfolio of litigation investments. Burford was one of the first companies to offer litigation financing to the public market.

Growth and Expansion

By 2017, Burford had completed significant transactions, with a portfolio valued at over $1 billion. The company reported revenues of $207.5 million, a 41% increase from the previous year. As of December 31, 2019, Burford had assets of $2.5 billion and a reported net income of $189.8 million.

Key Financial Metrics

Recent Developments and Market Position

As of 2023, Burford Capital is recognized as a leader in litigation finance, commanding a significant market share. The company has established a diversified portfolio that includes various sectors such as commercial disputes, arbitration, and insolvency cases. Recent reports indicate a growing interest in litigation funding, with a market projected to reach $30 billion by 2025.

Challenges and Controversies

Burford has faced challenges, including scrutiny over its financial practices and the inherent risks of litigation financing. In 2020, a short-seller report raised concerns about the company’s accounting practices, which led to a temporary decline in stock price. However, Burford has since recovered and continues to attract significant investor interest.

Investment and Funding Strategies

The company employs a range of funding strategies, including providing capital for specific cases and portfolio investments for law firms. Burford's unique approach allows it to manage risk effectively while generating significant returns. For the fiscal year 2022, Burford reported a return on equity of approximately 12%.

Future Outlook

Looking ahead, Burford Capital aims to capitalize on the increasing demand for litigation financing. The company's strategy includes expanding its geographic reach and diversifying its investment portfolio further. Analysts predict a robust growth trajectory, forecasting revenues to exceed $500 million by 2025.

Conclusion

The trajectory of Burford Capital demonstrates the evolving landscape of litigation finance, with the company poised to leverage its expertise and market position to drive future growth.

A Who Owns Burford Capital Limited (BUR)

Major Shareholders

As of the most recent data available in 2023, Burford Capital Limited (BUR) has a diverse ownership structure. The major shareholders include:

• Harris Associates LLC: 12.7% ownership
• Franklin Templeton Investments: 9.4% ownership
• BlackRock Inc.: 6.2% ownership
• Janus Henderson Group plc: 5.1% ownership
• Invesco Ltd.: 4.8% ownership

Institutional Ownership

Institutional investors hold a significant portion of Burford Capital's shares. According to data from August 2023, approximately 64.3% of the company is owned by institutional investors.

Insider Ownership

The ownership by company insiders is relatively low, comprised of approximately 5.2% of the total shares outstanding. Notable insiders and their respective ownership include:

• Christopher Bogart (CEO): 1.2% ownership
• David Perla (Co-CEO): 1.0% ownership
• Other executives and directors: 3.0% ownership

Share Performance and Market Capitalization

As of October 2023, Burford Capital Limited has a market capitalization of approximately $1.5 billion. The share price as of the last trading day was $16.50 per share. The company's shares have shown a year-to-date performance of 30%.

Investment Strategy and Growth

Burford Capital Limited primarily invests in legal finance, focusing on the funding of commercial litigation and arbitration. The company has reported a total of $1 billion in capital deployed across various cases as of the second quarter of 2023.

Recent Developments

In 2023, Burford reported a significant increase in its case portfolio, with over 140 active investments, representing an increase of 15% year-on-year. Furthermore, the company has expanded its operations into new markets including Asia and Europe.

Burford Capital Limited (BUR) Mission Statement

Overview

Burford Capital Limited, a leading provider of litigation finance, aims to enhance access to justice by funding legal claims and providing advisory services. The mission statement articulates the company's commitment to securing favorable outcomes for its clients while driving shareholder value.

Key Objectives

The key objectives include:

• To deliver innovative financing solutions for legal disputes.
• To emphasize the importance of ethical investments in litigation.
• To foster a culture of transparency and accountability in operations.
• To maintain strong relationships with clients and legal professionals.

Recent Financial Performance

As of December 31, 2022, Burford Capital reported the following financial highlights:

Investment Strategy

Burford’s investment strategy focuses on various types of litigation financing, including:

• Commercial litigation.
• Arbitration financing.
• Judgment enforcement.

The company typically invests between $1 million and $50 million in each case, depending on the specifics of the legal matter.

Market Position

Burford Capital holds a significant position within the litigation finance industry, evidenced by its market capitalization of approximately $1.2 billion as of late 2022. The company has funded over $3.3 billion in legal claims since inception.

Corporate Social Responsibility

Burford Capital is committed to social responsibility by:

• Supporting pro bono legal services.
• Engaging in sustainable business practices.
• Promoting diversity and inclusion within the legal profession.

Future Outlook

Looking forward, Burford aims to expand its market reach and diversify its funding sources. The projected growth rate for the litigation finance market is expected to be around 10% annually over the next five years.

How Burford Capital Limited (BUR) Works

Business Model

Burford Capital Limited operates primarily in the field of legal finance, providing capital solutions to lawyers and their clients. The company focuses on funding litigation costs, purchasing legal claims, and offering advisory services. This enables firms to manage their risks while allowing Burford to earn returns on successful outcomes.

Funding Mechanism

Burford's funding typically involves:

• Litigation funding
• Arbitration funding
• Portfolio financing
• Claim acquisition

In 2022, Burford reported a total of $1.1 billion in investment assets and has funded approximately $500 million in litigation costs since inception.

Financial Performance

As of 2022, Burford Capital reported:

• Revenue: $423 million
• Net profit: $176 million
• EBITDA: $384 million

The company achieved a return on invested capital (ROIC) of approximately 20%.

Investment Portfolio

Burford's investment portfolio includes various cases across different sectors, including:

• Commercial litigation
• Intellectual property
• International arbitration

As of mid-2023, the portfolio is valued at approximately $2.4 billion.

Market Position

Burford Capital is recognized as one of the leading players in the legal finance industry. According to industry estimates, Burford holds a market share of approximately 16% in the global legal finance market.

Recent Developments

In 2023, Burford announced the launch of a new fund aimed at increasing its capacity to finance larger cases, targeting an initial size of $300 million. Additionally, the company expanded its operations into Asia, specifically focusing on jurisdictions like Singapore and Hong Kong.

Key Financial Ratios

Risk Management

Burford employs a rigorous risk assessment process in evaluating potential investments. Factors considered include:

• Merits of the legal case
• Jurisdictional issues
• Counterparty risk

The company reported that it has a success rate of approximately 80% on the cases it funds.

Conclusion on Growth and Future Prospects

Burford Capital continues to expand its reach and capabilities within the legal finance market. The company's focus on innovation and strategic partnerships is expected to drive growth, with projected revenues in 2023 estimated at $460 million, a remarkable increase from previous years.

How Burford Capital Limited (BUR) Makes Money

Litigation Finance

Burford Capital primarily operates in the field of litigation finance, providing capital to businesses involved in legal disputes. As of 2023, Burford has committed approximately $3.5 billion in capital to various legal cases globally. The company takes a position as a contingent financier, meaning they only receive returns upon successful resolution of cases.

• Average investment size: $5 million per case
• Average duration of investment: 3-5 years
• Expected returns on investment: 20-30% annually

Asset Monetization

Burford also generates revenue through the monetization of legal assets. This involves purchasing interests in legal claims or settlements at a discounted rate. In 2022, Burford reported a successful monetization of claims worth $1.2 billion, yielding a profit margin of 40%.

Portfolio Diversification

The company's portfolio is diversified across various sectors, which allows it to mitigate risks. As of 2023, the breakdown of Burford's investments by industry is as follows:

Transactional Revenue

Burford earns transactional revenue through advisory services and legal consultancy. During 2022, Burford reported revenues of approximately $50 million through advisory services, which include legal strategy consulting and valuation services for litigation finance.

Return on Investment (ROI)

The company's ROI metrics are a key part of its revenue model. As of the 2022 financial year, Burford achieved a return on equity (ROE) of 18%. The company targets a long-term ROE of over 15%.

Legal Fees and Costs Recovery

Burford typically recoups legal fees and other costs related to the funded cases. The data for FY 2022 showed that Burford successfully recovered legal costs of about $120 million, contributing to its overall profitability.

Financial Performance Overview

For the fiscal year ending December 2022, Burford reported the following financial figures:

Market Positioning

Burford Capital holds a strong market position within the sector, with a market capitalization of about $2.5 billion as of late 2023.

Future Growth Projections

Analysts project Burford's market growth to continue with an expected compound annual growth rate (CAGR) of 15% over the next five years, driven by increased demand for litigation finance solutions.