Burford Capital Fund Business Progress,Senior Team Expand/Realigns (4276Z)

TIDMBUR

RNS Number : 4276Z

Burford Capital

15 December 2017

This announcement contains inside information.

15 December 2017

BURFORD CAPITAL UPDATES ON FUND BUSINESS PROGRESS

AND ANNOUNCES EXPANSION AND REALIGNMENT OF SENIOR TEAM

Burford Capital Limited ("Burford" or "the Company"), a leading global finance firm and investment management firm focused on law, today reports on the strong progress of its fund business at the one-year anniversary of its acquisition of Gerchen Keller Capital ("GKC") and announces changes in Burford's staffing and structure that position the business to meet the continuing growth of the legal finance sector.

Burford's fund business

Burford announced the acquisition of GKC, the largest fund manager in the litigation finance sector, a year ago. That acquisition provided Burford with the ability to access private as well as public capital to meet the needs of its clients and broaden the sources of funding to finance its continuing growth.

Successful acquisition

The acquisition has been a success. Burford rapidly integrated GKC and now operates the business as a single unified platform. GKC is now known as Burford Capital Investment Management LLC, which serves as the US Securities and Exchange Commission-registered investment manager for all Burford investment funds, including those raised by GKC.

Fully integrated

Burford's industry-leading legal investment team, into which GKC's staff has been assimilated, now operates on a single cross-platform basis, reviewing all potential investments regardless of their source of capital and managing all ongoing investments. Burford uses a single Investment Committee to review all commitments of new capital to any strategy.

$16 million in 2017 fund income already contributed

Financially, the funds business has contributed management fee income and early performance fee income. In 2017, we expect to earn approximately $13 million in management fees from the funds. In addition, we expect approximately $3 million in performance fees to be released in 2017, a figure larger and earlier than our original expectations. The performance to date of the funds business has exceeded our expectations at the point of acquisition.

In addition to that direct fund income, Burford has also benefited from a further $2.9 million in income from the successful resolution of an investment originally held on GKC's balance sheet and purchased directly by Burford as part of the GKC acquisition.

Early success from new complex strategies fund

We were pleased to raise a new $500 million fund for complex strategies in June 2017. Our complex strategies investments have already enjoyed early success. We have made six investments to date, committing $311 million of capital, a more rapid pace than we were originally projecting. One of the investments has already resolved, generating $3.8 million in gross profit on an investment of $22.8 million, for a gross IRR of more than 200%.

Other funds show multi-year financial potential

As to our other funds, 24 resolved investments in the three Partners funds and associated sidecars have generated a 64% return on invested capital to date with an average duration of 1.6 years, producing a gross IRR of 52%. The three Partners funds presently have 53 ongoing investments.

Burford's post-settlement investments in its credit opportunities fund and associated sidecars have returned more than $600 million to investors to date, with a gross IRR of 14% on those lower-risk, shorter-duration investments and an average duration of 0.7 years.

Burford's management structure and staffing

Christopher Bogart and Jonathan Molot, respectively Burford's Chief Executive Officer and Chief Investment Officer, have both renewed their employment agreements with Burford through the end of 2020.

As a result of the successful and rapid completion of the integration of the fund business within the Group, the three GKC principals (Adam Gerchen, Ashley Keller and Travis Lenkner) will become Senior Advisers to Burford and continue to serve on the Burford Investment Committee while stepping back from their operating roles. In their new positions, they will continue to lend their insights to the business while also being able to pursue other ventures, although they will remain subject to non-compete and non-solicitation agreements until December 2020 and a lock-up on their Burford stock until December 2019.

Burford has been engaged in a program of continuous growth and expansion of its industry-leading team, adding 22 new staff in 2017. Presently, we have a team of around 90, including around 40 experienced lawyers. Our team also includes a broad range of multi-disciplinary experts, including former investment bankers, asset managers, private equity professionals and hedge fund managers.

Burford announces the following appointments:

 
 --   Elizabeth O'Connell has been appointed as Burford's 
       Chief Financial Officer. Ms. O'Connell has been 
       a Burford Managing Director since its inception 
       in 2009, managing its investor relations function, 
       and more recently has been overseeing its finance 
       function. Ms. O'Connell is a Chartered Financial 
       Analyst. Following a career in investment banking 
       with Salomon Brothers, Citibank and Credit Suisse, 
       Ms. O'Connell served as the Chief Financial Officer 
       for Glenavy Capital LLC, a private investment vehicle, 
       and Churchill Ventures Limited, a listed investment 
       company. 
 
 --   Aviva Will has been appointed as a Senior Managing 
       Director with broad responsibility for Burford's 
       underwriting and investment management in its core 
       litigation finance business. Ms. Will has been a 
       Burford Managing Director since 2010 and runs Burford's 
       New York office. Ms. Will was previously Assistant 
       General Counsel at Time Warner Inc., where she managed 
       a portfolio of significant antitrust, intellectual 
       property and complex commercial litigation, and 
       was also the company's chief antitrust and regulatory 
       counsel. Prior to joining Time Warner, Ms. Will 
       was a senior litigator at Cravath, Swaine & Moore. 
 
 --   Emily Slater has been appointed as a Managing Director 
       and will oversee Burford's business development 
       activities with US law firms. Ms. Slater has been 
       with Burford since 2010 and has historically played 
       a senior role in Burford's investment process. Her 
       appointment to this new role reflects Burford's 
       continued expansion of its relationship with law 
       firms to provide innovative capital and risk management 
       solutions. Ms. Slater was previously a litigator 
       at Debevoise & Plimpton. 
 
 --   Katharine Wolanyk has been appointed as a Managing 
       Director and will oversee Burford's Chicago office 
       and its intellectual property business. Ms. Wolanyk 
       has been with Burford and GKC since 2015 and has 
       been instrumental in the integration of Burford 
       and GKC. Ms. Wolanyk has a wide range of legal and 
       business experience in intellectual property, including 
       serving as President and Chief Legal Officer of 
       Soverain Software, a lawyer at Latham & Watkins 
       and an engineer at Hughes Aircraft Company, and 
       has both law and engineering degrees. 
 
 --   Jeffery Commission will join Burford as a Director 
       upon the conclusion of his garden leave period in 
       the first half of 2018. Mr. Commission practiced 
       law with a specialty in international arbitration 
       for 15 years at firms including Freshfields and 
       Linklaters before joining Vannin Capital, and has 
       dual law degrees from McGill University and a Master 
       of Laws from University College London in International 
       Dispute Settlement. 
 
 --   John Lazar has been appointed as a Director. Mr. 
       Lazar has been with Burford since 2015 and will 
       now manage Burford's US commercial litigation finance 
       underwriting function. Mr. Lazar was previously 
       a litigator at Cravath, Swaine & Moore and Wollmuth 
       Maher & Deutch. 
 
 --   Brian Tracy has joined Burford as Director, Investor 
       Relations. Mr. Tracy was previously a director at 
       Brookfield Asset Management, a $250 billion global 
       alternative asset manager, and a Managing Director 
       at Bear Stearns among other senior financial services 
       industry positions. 
 
 --   Eric Carlson has been appointed as an IP Principal. 
       Mr. Carlson has been with Burford and GKC since 
       2014 focused on intellectual property investments. 
       Mr. Carlson was previously an IP litigator at Katten 
       Muchin Rosenman and Jones Day. 
 
 --   Philipp Leibfried has joined Burford as UK/European 
       Corporate Counsel, with a role in corporate matters 
       and in helping to develop the German market for 
       Burford. Mr. Leibfried comes to Burford from almost 
       a decade at Freshfields and holds law degrees from 
       Oxford and University College London. 
 
 --   Annie Duffy has joined Burford as Chief Compliance 
       Officer. Ms. Duffy is a lawyer and an experienced 
       compliance and government affairs professional, 
       most recently serving as Vice President and Chief 
       of Staff, Legal and Compliance at Nuveen Investments 
       and Compliance Director at Fidelity Investments. 
 
 --   Joshua Harris has joined Burford as a Vice President, 
       focused on patent matters. Mr. Harris was previously 
       a litigator at Loeb & Loeb with a particular focus 
       on pharmaceutical patent litigation and has both 
       law and biophysics degrees. 
 

Christopher Bogart, Chief Executive Officer of Burford, commented:

"I am delighted with the progress we have made in fully absorbing the GKC business within Burford and I am thrilled with the depth of our management team and the new additions and promotions we have announced. The business is firing on all cylinders with its ability to access capital from public and private sources as well as a burgeoning secondary market. The entire operation is now operating seamlessly on the Burford platform. I look forward to the continued growth of the combined business."

The person responsible for arranging for the release of this announcement on behalf of the Company is Elizabeth O'Connell, Chief Financial Officer.

For further information, please contact:

 
   Burford Capital Limited 
   Elizabeth O'Connell, CFA, Chief          +1 212 235 
    Financial Officer                        6825 
 
   Macquarie Capital (Europe) Limited       +44 (0)20 
    - NOMAD and Joint Broker                 3037 2000 
   Jonny Allison 
   Nicholas Harland 
 
   Liberum Capital Limited - Joint          +44 (0)20 
    Broker                                   3100 2222 
   Richard Crawley 
   Jamie Richards 
 
   Numis Securities Limited - Joint         +44 (0)20 
    Broker                                   7260 1000 
   Charlie Farquhar 
   Andrew Holloway 
 
   Neustria Partners - Financial            +44 (0)20 
    Communications for Burford Capital       3021 2580 
   Robert Bailhache [email] 
   Charles Gorman [email] 
   Nick Henderson [email] 
 

About Burford Capital

Burford Capital is a leading global finance and investment management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the London Stock Exchange, and it works with law firms and clients around the world from its principal offices in New York, London and Chicago.

For more information about Burford: www.burfordcapital.com

This information is provided by RNS

The company news service from the London Stock Exchange

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December 15, 2017 02:00 ET (07:00 GMT)