Burford Capital plans to raise £200 million ($318 million) in an initial public offering (IPO) to finance commercial litigation in the US.

The Guernsey-based investment fund is expected to become the second largest listing on London's Alternative Investment Market (AIM) this year.

Shares on AIM are expected to start trading on or around 16 October.

The company will fund the cost of litigation or arbitration, agreeing with its corporate client a percentage share of any awards which are made at the end of a case.

Burford Group will act as the investment adviser to the company. Its principals are Selvyn Seidel, a former senior partner at law firm Latham & Watkins, and Christopher Bogart, a former general counsel at Time Warner. They believe there are more commercial disputes in an economic downturn while the ability of claimants to fund lawsuits diminishes.

London Stock Exchange (LSE) research shows that more investment funds from Guernsey were listed on its main market and AIM in 2008 than any other jurisdiction. Guernsey (15) was only marginally ahead of the UK (13).

Fox-Pitt Kelton Cochran Caronia Waller is managing the IPO, along with Execution.

Burford Capital is a limited liability, closed-ended investment company registered in Guernsey. Its fund administrator is International Administration Guernsey (IAG) with legal counsel being provided by Ogier and PricewaterhouseCoopers as auditor. All are based in Guernsey.

Burford Capital's board of directors includes the former HM Treasury official and group chairman of Barclays Bank, Sir Peter Middleton as chairman.