This is a really good post, Tristan! I've been an investor in Begbies for over 3 years now, and you've given me some food for thought and insight that is new. Especially the part about getting early leading indicators. FWIW I think there are many jaded investors here who have been waiting for the Insolvency market to explode. Yes, it has trended up nicely YoY for Begbies, but no explosive growth yet. Will 2024 bring that? Hard to see why not given cost of capital is now high and companies are facing rising costs of debt while inflation has also increased input costs. Time will tell... (I hold in the Boon Fund)
Thanks for this writeup. Would you consider Burford Capital ltd within your circle of competence? I just started to look into it and would appreciate your expertise.
Burford is quite different to something like Begbies as a litigation financier, but certainly I think it is within my grasp to understand as I have done a lot of legal studies and exposure in my day job. Hence why I consider law as part of my circle.
For your interest, I have already written up Litigation Capital Management almost 3 years ago now. It is the same business operating in the UK & AUS with more conservative accounting. If you would like to start in litigation finance, I think LCM is probably the easiest to understand. There is also Omni Bridgeway on the ASX, RBG Holdings in the UK and Manolete Partners for example which are all peers.
Just for completeness, I would point out that Burford has now agreed an accounting approach with the US authorities and LCM has announced changes to their accounts presentation which, I believe, will bring them into line with this. It will be useful when all the litigation funders start reporting in a similar fashion. Also RBG Holdings has sold off their litigation funding arm after getting early losses and realising that they don't know what they are doing (mucho ruckus at that company).
This is a really good post, Tristan! I've been an investor in Begbies for over 3 years now, and you've given me some food for thought and insight that is new. Especially the part about getting early leading indicators. FWIW I think there are many jaded investors here who have been waiting for the Insolvency market to explode. Yes, it has trended up nicely YoY for Begbies, but no explosive growth yet. Will 2024 bring that? Hard to see why not given cost of capital is now high and companies are facing rising costs of debt while inflation has also increased input costs. Time will tell... (I hold in the Boon Fund)
Thanks for this writeup. Would you consider Burford Capital ltd within your circle of competence? I just started to look into it and would appreciate your expertise.
Hi Erpan,
Burford is quite different to something like Begbies as a litigation financier, but certainly I think it is within my grasp to understand as I have done a lot of legal studies and exposure in my day job. Hence why I consider law as part of my circle.
For your interest, I have already written up Litigation Capital Management almost 3 years ago now. It is the same business operating in the UK & AUS with more conservative accounting. If you would like to start in litigation finance, I think LCM is probably the easiest to understand. There is also Omni Bridgeway on the ASX, RBG Holdings in the UK and Manolete Partners for example which are all peers.
Here is the LCM post.
https://hurdlerate.substack.com/p/litigation-capital-management-lonlit
Just for completeness, I would point out that Burford has now agreed an accounting approach with the US authorities and LCM has announced changes to their accounts presentation which, I believe, will bring them into line with this. It will be useful when all the litigation funders start reporting in a similar fashion. Also RBG Holdings has sold off their litigation funding arm after getting early losses and realising that they don't know what they are doing (mucho ruckus at that company).
Excellent writeup and quite interesting business👍.
I’ve featured a link to this post in my latest Friday Roundup:
https://open.substack.com/pub/rhinoinsight/p/the-friday-roundup-752?r=2587ts&utm_medium=ios&utm_campaign=post