London investors will have the chance to grab a share of the profits - or possibly losses - made by big no-win-no fee corporate legal actions in the US thanks to a £200 million flotation.

Burford Capital finances corporate legal actions, taking a big profit if their client wins, but losing everything if they do not. It is set to float on AIM next month to raise cash which it will spend taking on new cases. Juridica Investment, a rival, is already listed on AIM.

Burford is chaired by Sir Peter Middleton the former Treasury mandarin who chaired Barclays for five years. The masterminds behind the business are US lawyers Christopher Bogart and Selvyn Seidel. Bogart was general counsel at Time Warner while Seidel worked at leading legal firm Latham & Watkins. They set up Burford two years ago.

London has developed as the centre of litigation financing, which is seen by many investors as an attractive alternative investment ranking alongside private equity and hedge funds.

Burford 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. It reckons to produce average investment returns of about 30%.