mercredi 18 mars 2015
Hedge Fund Betting on Lawsuits Is Spreading
Posted on 16:37 by nice news
For better or worse, the lawsuit-finance market continues to grow. Hedge funds and others speculating on litigation are making more and larger bets. Some corporate lobbyists warn that the new financial engineering encourages wasteful courtroom warfare, but investor demand for fat returns—and big law firms' appetite for business—guarantee the spread of litigation finance.
Burford Capital, the largest player in the nascent U.S. litigation-finance business, on Wednesday reported strong results for 2014. Revenue rose 35 percent, to $82 million, with a 43 percent rise in operating profit, to $61 million, Burford said. Celebrating its fifth anniversary, U.K.-based Burford has built a $500 million arsenal, Chief Executive Officer Christopher Bogart says. All told, it has made 32 investments that have generated $209 million in gross recoveries and $78 million net of its invested capital, he adds.
Of broader importance, Burford has helped move litigation finance into the corporate-litigation mainstream. While its most notorious—and least successful—investment supported a class action oil pollution lawsuit against Chevron in Ecuador, Bogart stresses that Burford mainly finances litigation initiated by major corporations and handled by big corporate law firms. Among the well-known law firms that have been involved in Burford-financed cases are Simpson Thacher & Bartlett, King & Spalding, and Latham & Watkins, adds the CEO, himself a former executive vice president and general counsel of Time Warner.
In its third year of operations in the U.S., an Australian-based litigation funder called Bentham IMF reported funding 10 deals in 2014, including "contract disputes, a patent-infringement trial, partnership disputes, and five law firm case portfolios." Bentham says that for the year it had gross returns of $31 million in the U.S., with net profit of $17 million. "The pace and volume of new funding opportunities have grown
Burford Capital, the largest player in the nascent U.S. litigation-finance business, on Wednesday reported strong results for 2014. Revenue rose 35 percent, to $82 million, with a 43 percent rise in operating profit, to $61 million, Burford said. Celebrating its fifth anniversary, U.K.-based Burford has built a $500 million arsenal, Chief Executive Officer Christopher Bogart says. All told, it has made 32 investments that have generated $209 million in gross recoveries and $78 million net of its invested capital, he adds.
Of broader importance, Burford has helped move litigation finance into the corporate-litigation mainstream. While its most notorious—and least successful—investment supported a class action oil pollution lawsuit against Chevron in Ecuador, Bogart stresses that Burford mainly finances litigation initiated by major corporations and handled by big corporate law firms. Among the well-known law firms that have been involved in Burford-financed cases are Simpson Thacher & Bartlett, King & Spalding, and Latham & Watkins, adds the CEO, himself a former executive vice president and general counsel of Time Warner.
In its third year of operations in the U.S., an Australian-based litigation funder called Bentham IMF reported funding 10 deals in 2014, including "contract disputes, a patent-infringement trial, partnership disputes, and five law firm case portfolios." Bentham says that for the year it had gross returns of $31 million in the U.S., with net profit of $17 million. "The pace and volume of new funding opportunities have grown
Hedge Fund Betting on Lawsuits Is Spreading
Categories: Hedge Fund Betting on Lawsuits Is Spreading
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