Fascinating analysis of Burford's legal finance model - particularly the uncorrelated returns and specialized underwriting. TCLM explores similar themes in trade credit and working capital finance, examining how businesses manage liquidity through alternative structures. Might be useful alongside your capital allocation research.
The industry itself is easy to understand; what's difficult are certain aspects of the business model, especially when it comes to big players like Burford Capital.
From my perspective, these types of companies require specialized know-how, like biotech companies or if you were an investor in distressed securities.
At the end of the day, LIT is easier to understand because it's much smaller. But go check out the annual reports of Burford and Omni Bridgeway, and I dare you not to go nuts, hahaha...
Fascinating analysis of Burford's legal finance model - particularly the uncorrelated returns and specialized underwriting. TCLM explores similar themes in trade credit and working capital finance, examining how businesses manage liquidity through alternative structures. Might be useful alongside your capital allocation research.
(It’s free)- https://tradecredit.substack.com/
Litigation finance is tough to understand.
The companies have good moats and a growing market (not much, but it's growing, especially in the US, which is the largest market).
I recommend you take a look at the write-up I did for one of Burford Capital's peers:
https://www.worldlyinvest.com/p/litigation-capital-management-lit
Is it just these 2? I'll check your write up out too
No, there's also Omni Bridgeway (ASX: OBL). Just 3 publicly traded. Most of them are private.
Thanks. I like your write up by the way. I think it's a really interesting industry.
Though I may be attracted to it because i would rather have these guys review litigation arb opportunities than do it myself.
Thanks for the kind words!
The industry itself is easy to understand; what's difficult are certain aspects of the business model, especially when it comes to big players like Burford Capital.
From my perspective, these types of companies require specialized know-how, like biotech companies or if you were an investor in distressed securities.
At the end of the day, LIT is easier to understand because it's much smaller. But go check out the annual reports of Burford and Omni Bridgeway, and I dare you not to go nuts, hahaha...
I checked the 10K, an old investment thesis and a short report of Burford. Man... it's hard to understand that company.
If you have the knowledge, go ahead. If not, stay away.