US Listing11 Jul 2020 00:16
https://www.law.com/americanlawyer/2020/07/10/dont-expect-flood-of-filings-following-burfords-bid-for-stock-exchange-presence/?slreturn=20200610181036
Don't Expect Flood of Filings Following Burford's Bid for Stock Exchange Presence
Different litigation financiers use different business models, experts say, which is why you shouldn't expect a wave of privately owned funds rushing to get on a U.S. stock exchange.
Litigation funding giant Burford Capital might have dreams of being traded on the New York Stock Exchange, but don’t expect other litigation financiers rushing to follow them.
Burford on Tuesday announced it had filed paperwork with the U.S. Securities and Exchange Commission in order to be listed on a U.S. stock exchange. What happens next, according to the firm, is a confidential review that’ll take months to play out.
Getting listed on a U.S. stock exchange would grant Burford more access to capital as well as different sources of it, said William Farrell, the managing director and general counsel of Longford Capital Management, a Chicago-based litigation financier that competes with Burford.
Despite this, don’t expect Longford and others to follow in Burford’s footsteps, Farrell said. That’s because Longford and Burford are using different models to raise money, he added.
“We are not considering going public and listing on the New York Stock Exchange,” Farrell said. “We like the private model and we think there’s advantages to that.”
If it is traded on a U.S. stock exchange, Burford will be able to tap into a new cohort of investors who never would have backed the litigation financier if it wasn’t for the stock exchange, Farrell said. However, Burford might also face pressure to post good results every quarter, which is something a private company like Longford doesn’t need to worry about, Farrell added.
Burford’s announcement “caused us to consider the advantages and disadvantages, and reaffirmed our preference to being a private model, being privately owned,” Farrell said.
The firm’s possible ascendancy to a U.S. stock exchange is a welcome development for the litigation-financing industry as a whole, said Charles Agee, the chief executive officer of Westfleet Advisors, which advises companies and law firms that are interested in obtaining litigation funding.
Having the largest litigation financier in the world become a publicly traded company on the New York Stock Exchange would serve as “validation” for the industry, Agee said. However, he doubted that Burford’s application to the SEC would be the start of a trend because there are different litigation-financing models in play.
Farrell noted that Burford was already a publicly listed company—its stocks are already trading on the London AIM, which is a submarket of the London Stock Exchange. Burford’s announcement comes six months after it first teased the possibility of getting on the New York Stock Exchange or the NASDAQ for its ordinary shares to be traded.
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