Global finance and asset manager Burford Capital Limited announced its new $360 million Burford Advantage Master Fund on Monday.
The Fund will reportedly focus on ‘lower risk, lower return pre-settlement litigation investments’ which Burford Capital includes in its core legal financial portfolio.
Burford Capital said its Fund will target pre-settlement litigation investments projected to pay out returns in the 12-20% IRR range.
According to the company, the Fund is set to fill the gap between lower return post-settlement investments fund known as the Burford Alternative Income Fund and Burford’s core business.
Burford Capital announced its intent to eschew the traditional Fund management style and fee structure, and has opted to provide the initial 10% of annual simple returns to investors while the firm retains the remainder.
According to the company, Burford Capital works better within its chosen structure once its returns exceed 13% than a traditional fee blueprint.
A selection of institutional investors have reportedly contributed $300 million alongside a further $60 million commitment by Burford Capital.
The Fund’s investment period is set to run until December 2024, followed by a multi-year harvest period under an American waterfall.
Burford Capital’s share were up 1% at 747p in late afternoon trading following the announcement.
“Burford is still scratching the surface of the legal finance market,” said Burford Capital CEO Christopher Bogart.
“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.”