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magazineBumper demand for Burford bond issue
Burford Capital (BUR:AIM) 859.96p
Gain to date: 17.2%
Previous Shares view: Original entry price: Buy at 734p
Litigation finance provider Burford Capital (BUR:AIM) is cashed up having completed its third successful retail bond offer to raise £175m. The offer saw strong demand and was heavily oversubscribed.
This injection of capital should help the company accelerate growth by investing in more cases.
Market leader Burford has two arms which both conduct the same activity, namely funding law suits in return for a share of a compensation award.
Numis estimates Burford has delivered an average internal rate of return (IRR) of more than 27% and, factoring in the new funds which the company can deploy, the house broker ups its earnings per share forecast for 2019 by 11% and hikes its price target from 880p to 950p.
Analyst Jonathan Goslin says: ‘Litigation finance represents an
attractive asset class with the potential for uncorrelated high returns from investments with automatic exits.
‘In our view, investing in Burford represents one of the most profitable and easiest means of accessing this rapidly growing industry.’
Keep buying this excellent business.
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