Burford Capital closes new post-settlement fund

Legal-focussed finance and asset management company Burford Capital announced the closing of the $350m Burford Alternative Income Fund II LP (BAIF II) on Monday, which it described as a new private fund focussed on post-settlement investments.

The AIM-traded firm said BAIF II would invest in settled litigation matters, monetising a claimant's settlement and other associated legal receivables.

It said it would serve to meet the needs of law firms awaiting payment of their fees, and clients eager to release cash from a settlement, who would find it “attractive” to secure financing against those expected receipts.

Together with a recent new $360m bond issue and the closing of a new $360m pre-settlement investment fund, Burford had raised more than $1bn in the past three months to further fund its growth.

BAIF II's investment period would run until 11 September 2025, with a multi-year harvest period thereafter.

The company said BAIF II would generally pay management fees of 1.5% of invested capital, with performance fees of 12.5% after a 5% preferred return with a full catch-up.

Burford said the fund would be the successor to its prior post-settlement funds, Burford Alternative Income Fund (BAIF) founded in 2019, and BCIM Credit Opportunities LP (COLP) founded in 2014.

BAIF's investment period ended 4 April 2022, while COLP's investment period ended 30 September 2019.

There would be no investment in BAIF II from Burford's balance sheet.

“We are delighted to close a new post-settlement fund, backed by a combination of existing and new Burford private fund LPs,” said chief executive officer Christopher Bogart.

“BAIF II's investment strategy will mimic BAIF and COLP, helping clients manage the frequent and significant delays that occur between the point at which parties agree a settlement and the finalisation of and payment under the settlement.

“The solution supports our aim of fulfilling client needs across the lifespan of a litigation matter's duration, from inception through to conclusion.”

At 1022 BST, shares in Burford Capital were down 4.06% at 721.5p.

Reporting by Josh White at Sharecast.com.