Burford Capital Limited · LSE:BUR
Burford Capital — Investor Presentation (June 2021)
24 slides from Burford Capital's investor presentation, June 2021
Slide 1: Burford Capital Investor Presentation
JUNE 2021 Burford Capital Investor Presentation
Slide 2: Notice & disclaimer
Notice & disclaimer This presentation (“Presentation”) provides certain information to facilitate review and understanding about the business and operations of Burford Capital Limited (the “Company”) and does not purport to be a complete description of the Company’s business or results. The informat
Slide 3: Table of Contents
OVERVIEW Table of Contents Content Slide(s) • Overview 4-5 • Market position 6-7 • Investment process 8 • Diversified portfolio 9-10 • Outsized returns 11-13 • Vintage analysis 14 • Capital structure 15 • Unrealized gains 16-17 • YPF-related assets 18 • Asset management 19 • Impact of Covid-19 20 •
Slide 4: The Burford opportunity
OVERVIEW The Burford opportunity Established market leader in rapidly expanding legal finance industry Outsized, uncorrelated returns and significant barriers to entry Proven platform and track record of significant cash flow generation Diversified portfolio across strategies, cases, clients
Slide 5: Burford is the global leader in legal finance
OVERVIEW Burford is the global leader in legal finance COMPANY OVERVIEW PORTFOLIO • Burford is the clear market leader in legal finance, managing a $4.5 Group-wide1 portfolio 1 4,483 billion Group-wide portfolio of legal assets ($ in millions) 4,209 1,554 • We provide financing, typically on a non-r
Slide 6: Well-positioned to benefit from continued adoption of legal finance
MARKET POSITION Well-positioned to benefit from continued adoption of legal finance COMPETITIVE ADVANTAGES STRONG MARKET POSITION WITH SIGNIFICANT GROWTH OPPORTUNITY • Significant size, scale and scope - World’s largest diversified portfolio of commercial legal assets - Innovative legal finance prod
Slide 7: Burford is just starting to scratch the surface of the large worldwide legal finance market
MARKET POSITION Burford is just starting to scratch the surface of the large worldwide legal finance market • Very large market with significant runway for growth • We expect our products to gain increased traction as knowledge and adoption of legal finance accelerates • We are expanding to meet our
Slide 8: Stringent asset selection, underwriting and portfolio management
INVESTMENT PROCESS Stringent asset selection, underwriting and portfolio management • Burford uses sophisticated financial modeling, leveraging in-house expertise • Robust internal portfolio management process to optimize each investment and proprietary data as a component of its underwriting and po
Slide 9: Portfolio focused on core litigation finance assets and complementary businesses
DIVERSIFIED PORTFOLIO Portfolio focused on core litigation finance assets and complementary businesses Portfolio composition by asset type LEGAL FINANCE % of Group-wide portfolio at December 31, 2020 91% Portfolio finance COMPLEX STRATEGIES Non-recourse funding of legal finance assets with multiple
Slide 10: Portfolio is broadly diversified across a number of measures
DIVERSIFIED PORTFOLIO Portfolio is broadly diversified across a number of measures Group-wide capital provision-direct commitments1 by geography Group-wide capital provision-direct commitments1 by case type at December 31, 2020 1% at December 31, 2020 ($ in millions) ($ in millions) 5% 23% 43% $3,06
Slide 11: Burford has generated outsized returns from both settlements and adjudications
OUTSIZED RETURNS Burford has generated outsized returns from both settlements and adjudications • Adjudicated wins provide higher ROICs than settlements from larger awards and higher time-based multiples on investment earned • Positive outcomes across 84% of deployments by cost Capital provision-dir
Slide 12: Asymmetric returns on adjudications drive attractive total returns
OUTSIZED RETURNS Concluded (fully and partially) capital provision-direct assets Burford only—arrayed by ROIC (%) Asymmetric returns on ($ in millions) adjudications drive A B C D Total attractive total returns 0% or less ROIC 0 to 99% ROIC 100 to 199% ROIC Greater than 200% ROIC $1,597 recovered De
Slide 13: 2020 realizations increased cumulative returns, with little impact on concluded asset tenors
OUTSIZED RETURNS 2020 realizations increased cumulative returns, with little impact on concluded asset tenors Capital provision-direct Capital provision-direct Burford only Burford only Portfolio returns since inception—concluded (fully and partially) portfolio Weighted average life of concluded (fu
Slide 14: Recent large vintages are poised to continue to drive future realizations
VINTAGE ANALYSIS Share of ongoing assets’ deployed costs by vintage age Capital provision-direct—Burford only 944 Recent large vintages are ($ in millions) 877 poised to continue to drive 726 future realizations 62% 69% 471 55% 385 • Early vintages, though small, 28% generated substantial 206 240 76
Slide 15: Substantial sources of liquidity complemented by a conservative debt structure
CAPITAL STRUCTURE Burford’s substantial sources of liquidity are complemented by a conservative debt structure LIQUIDITY CONSERVATIVE DEBT STRUCTURE • Substantial balance sheet liquidity of $336 million at December 31, 2020, our • Burford’s debt maturities are considerably longer than their expected
Slide 16: Capital provision asset fair value adjustments driven by objective litigation events
UNREALIZED GAINS Capital provision asset fair value adjustments driven by objective litigation events Aggregate carrying value1 of capital provision cases • IFRS 9 requires fair value of Burford’s capital provision assets Total consolidated capital provision assets at year-end 2020 • Case milestones
Slide 17: YPF-related assets dominate cumulative unrealized gains
UNREALIZED GAINS YPF-related assets dominate cumulative unrealized gains, though 2020 saw non-YPF assets contribute Unrealized gains on capital provision assets (direct and indirect) • At year-end 2020, cumulative fair value adjustment of $915 Burford only million represented 48% of capital provisio
Slide 18: YPF-related assets have generated significant value
YPF-RELATED ASSETS Burford’s YPF-related assets have generated significant value—with potential to deliver significantly more • YPF-related assets (Petersen and Eton Park claims) have generated over $1 billion of value - $236 million in cash from sales of portions of Burford’s entitlement to proceed
Slide 19: Asset management income enhances returns
ASSET MANAGEMENT Asset management income Capital provision-direct income Burford only Asset management income Group-wide ($ in millions) ($ in millions) 508 6 enhances returns 26 2020 funds 24 397 total: 187 181 7 38 2019 funds • Private funds and the sovereign 6 57 1 total: 95 wealth fund (BOF-C) c
Slide 20: New business outlook as we emerge from the pandemic
IMPACT OF COVID-19 New business outlook as we emerge from the pandemic • The pandemic has had much less of an impact on our forward progress than was possible at its outset - New commitments and deployments rebounded in 2H20and the pipeline of new business began to rebuild after a significant slowdo
Slide 21: Supplementary data
Supplementary data [Burford
Slide 22: Statement of comprehensive income for the year ended December 31, 2020
RECONCILIATION OF BURFORD ONLY RESULTS TO CONSOLIDATED FINANCIAL STATEMENTS Statement of comprehensive income for the year ended December 31, 2020 Elimination of 1 Refers to assets, liabilities and activities excluding any Consolidated third-party Burford only1 third-party interests and the portions
Slide 23: Financial position for the year ended December 31, 2020
RECONCILIATION OF BURFORD ONLY RESULTS TO CONSOLIDATED FINANCIAL STATEMENTS Financial position for the year ended December 31, 2020 Elimination of 1 Refers to assets, liabilities and activities excluding any Consolidated third-party Burford only1 third-party interests and the portions of jointly own
Slide 24: [Burford
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