Burford Capital Limited, the leading global law-focused finance and asset management firm, today announces that it has raised a new $360 million private equity fund, the Burford Advantage Master Fund LP (“Advantage Fund”).
The Advantage Fund focuses on lower risk, lower return pre-settlement litigation investments than those we include in our core legal funding portfolio, targeting cases expected to produce returns in the range of 12 to 20% IRR. The Advantage Fund bridges the gap between the Burford Alternative Income Fund, which focuses on post-settlement low yield investments, and Burford’s core business.
The Advantage fund has a structure that rewards Burford more than traditional fund models for producing good performance: the fund does not have a traditional management and performance fee structure, but instead provides the top 10% of annual simple returns to investors in the fund while Burford retains any excess returns. Based on our internal modeling, Burford does better with this approach than a traditional “2 and 20” fee structure once its returns exceed approximately 13%. (If the fund produces higher than normal returns for this level of risk, which is not expected, a level of sharing with the fund’s investors would come into play.)
A series of institutional investors have pledged a total of $300 million. Burford has pledged 20%, or an additional $60 million. The Advantage Fund’s investment period runs until December 24, 2024, with a harvest period of several years thereafter under a US waterfall.
Christopher Bogart, Burford of the capital chief executive ohofficer, commented :
“Burford only scratches the surface of the legal finance market. As we continue to meet the needs of our customers, we have seen unmet demand for mid-range products where the risk of litigation remains, but where the risk is expected to be lower for structural or other reasons. In response to this demand, we created the Advantage Fund to match client demand with institutional investors seeking exposure to uncorrelated legal finance cash flows at lower risk of loss with commensurate returns.
On Burford Capital city
Burford Capital is the world’s leading legal-focused finance and asset management company. Its activities include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is listed on the New York Stock Exchange (NYSE:BUR) and the London Stock Exchange (LSE:BUR), and it works with companies and law firms around the world from its main offices in New York, London , Chicago, Washington, DC, Singapore, Sydney and Hong Kong.
For more information, please visit www.burfordcapital.com.
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