Global legal finance specialist closes £300m private investment fund

Burford Capital Limited, the global finance and asset management firm focused on law, has announced it has raised a new $360m (approx. £300m) private investment fund, the Burford Advantage Master Fund LP.

The Advantage Fund focuses on lower risk, lower return pre-settlement litigation investments than are included in its “core legal finance portfolio”, targeting matters expected to produce returns in the 12 - 20 per cent IRR range.

The Advantage Fund fills the gap between the Burford Alternative Income Fund, which focuses on lower return post-settlement 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 first 10 per cent of annual simple returns to the fund investors while Burford retains any excess return.

A range of institutional investors made commitments in the aggregate amount of $300m. Burford has made a 20 per cent commitment with a further $60m. The Advantage Fund’s investment period runs until December 24, 2024, with a multi-year harvest period thereafter under an American waterfall.

Christopher Bogart, Burford Capital’s chief executive officer, commented: “Burford is still scratching the surface of the legal finance market. As we continue to respond to our clients’ needs, we have found unmet demand for products in the middle range where litigation risk remains but where the risk is anticipated to be lower for structural or other reasons.

“In response to this demand, we have created the Advantage Fund to match client demand with institutional investors seeking exposure to the uncorrelated cash flows of legal finance at a lower risk of loss with commensurate returns.”