Litigation financier Burford Capital today warned on profits for 2019.
The company, led by Christopher Bogart, which invests in legal cases in return for a slice of the proceeds, said profits would be damaged as fewer cases closed in 2019 than in 2018.
This has led to “realised gains” coming in $20-30 million lower than expected. Realised gains are what Burford gets from the resolution of a legal case.
Burford warned: “We can neither predict nor control the timing of the generation of litigation returns. Burford is not a business for those focused on short-term profits or who eschew volatility and seek predictability. We finance large, complex commercial claims. Our cash flows come from their resolution. There is no ‘normal’ for such claims; they are inherently idiosyncratic.”
The results will do little to calm investor concerns that litigation finance is unpredictable with lumpy returns.
Burford has been embroiled since August in a stand-off with short-seller Muddy Waters over lack of transparency.
Its shares fell in early morning trading, down 2% or 14.2p at 616p.
