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Burford Capital (AIM:BUR) - brilliant business or too much secrecy to be a comfortable investment?

20/09/2017

Burford Capital (AIM:BUR) - brilliant business or too much secrecy to be a comfortable investment?
The provider of litigation funding has seen its market capitalisation soar to over £2bn. With results riddled with estimates and little known about much of its underlying legal claims could this be a case of a share that appears too good to be true….and is? Our latest research here digs deeper.

Burford Capital (AIM:BUR) provides litigation finance and related services from principal offices in New York, London and Chicago.

- Background

Floated in 2009, its income (i.e. revenue) growth has been consistently excellent. 2017 H1 income grew by a staggering 130%, reaching $175.5 million. Profit after tax almost tripled, growing 170% to $143 million. More profit was generated in the first six months of 2017 than had ever been generated in a full year by Burford.

Burford has been a signal success (so far) for shareholders, as the interim report pointedly reminds us that investors in the 2009 IPO have achieved a 1,040% total return through July 2017.

In December 2016, Burford acquired Gerchen Keller (20 employees), thereby moving into fund management and achieving $1.7 billion in assets under management as of June 2017.

Of this figure, $500 million relates to a new perpetual fund by Burford with a hedge fund-style (2% management…

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