Burford Capital Limited · LSE:BUR
Burford Capital — Q3 2023 Earnings Presentation
36 slides from Burford Capital's earnings presentation, Nov 9, 2023
Slide 1: Burford Capital Third Quarter 2023 Results
November 9, 2023 Burford Capital Third Quarter 2023 Results This presentation is for the use of Burford’s public shareholders and is not an offering of any Burford private fund.
Slide 2: Notice & disclaimer
Notice & disclaimer This presentation (this “Presentation”) provides certain information to facilitate review and understanding of the business, financial position and results of operations of Burford Capital Limited and its subsidiaries (the “Company”, “Burford”, “we”, “our” or “us”) at and for the
Slide 3: Portfolio continues to perform with strong cash generation
Portfolio continues to perform with strong cash generation Strong total revenue growth Selected financial results - Consolidated total revenues of $794 million for 9M23, up 5x compared to the prior-year period Nine months ended September 30, 2023 Burford-only - $211 million of Burford-only1 realized
Slide 4: Growth in Burford-only total revenues drives significant earnings improvement
Growth in Burford-only Nine months ended September 30, Three months ended September 30, total revenues drives significant earnings Selected statement of operations improvement data 2023 2022 % 2023 2022 % Burford-only change change ($ in thousands, except per share data) • Burford-only capital provi
Slide 5: Capital provision income broad based in addition to YPF-related contribution
Capital provision income broad based in addition to significant contribution from YPF-related assets Nine months ended September 30, Three months ended September 30, • Growth in realized and unrealized gains, excluding YPF-related assets, Capital provision income % % from increased case resolutions
Slide 6: Asset management income primarily driven by income from BOF-C
Asset management income Asset management income Burford-only ($ in millions) primarily driven by income 41 41 from BOF-C • Burford-only asset management 34 35 income of $41 million, driven by 16 income from BOF-C - European waterfall structure 5 14 2 for performance fees on many 5 6 3 2 2 of our pri
Slide 7: Burford has generated strong cash-on-cash returns
Burford has generated strong cash-on-cash returns • Burford has generated consistently high returns on $2.5 billion of realizations since inception in 2009 through September 30, 2023 • A recurring mix of settlements and wins drives strong returns in reasonable time frames, with asymmetrically low lo
Slide 8: YPF-related assets have the potential to create considerable upside
We believe YPF-related assets have the potential to create considerable upside1 • Final judgment a complete win against Argentina of $16 billion, at the high end of the possible range of damages • Argentina has filed a notice of appeal to the Second Circuit Court of Appeals • Fair value of YPF-relat
Slide 9: New business up meaningfully in 9M23
New business up Total new commitments Group-wide - capital provision-direct meaningfully in 9M23 ($ in millions) 1,023 884 • Strong Burford-only new business in 268 156 9M23 underpins future potential 2 106 587 capital provision income 569 63 486 - Burford-only capital provision 159 138 84 1 direct
Slide 10: Salaries & benefits and GA&O only slightly higher after noted items
Salaries & benefits and GA&O only slightly higher after certain noted items in 9M23 compared to 9M22 Total operating expenses Burford-only 9M23 Noted1 9M22 Noted1 ($ in thousands) • Operating expenses reflect strong Compensation and benefits portfolio performance and certain idiosyncratic events Sal
Slide 11: Robust liquidity
Burford-only cash receipts1 Burford-only liquidity and receivables Robust liquidity ($ in millions) At period end ($ in millions) 380 • Strong liquidity position at September 328 34 70 30, 2023 primarily reflects continued 281 22 27 31 63 solid Burford-only cash receipts and 10 16 25 229 107 issuanc
Slide 12: Laddered maturities and low leverage
Maturity of debt outstanding ($ in millions) Laddered maturities and low leverage WAL of debt: 5.3 years WAL of capital provision-direct assets: 2.5 years 1 400 400 • Laddered debt maturity schedule with 360 the next debt maturity not until August 2025 and a weighted average life of debt maturities
Slide 13: Four pillars of Burford's value proposition
Four pillars of Burford’s value proposition 1. Core portfolio 2. Origination platform • Burford-only capital provision-direct cumulative realizations • Clear market leader with significant scale and meaningfully larger since inception through September 30, 2023 of $2.5 billion with than any competit
Slide 14: Financial results
Financial results [Burford
Slide 15: Statement of operations for the three months ended September 30, 2023
Statement of operations for the three months ended September 30, 2023 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated V alue Fund BOF-C Colorado Fund Other Burford-only Revenues Capital provision income/(loss) 504,513 (845) (36,193) (140,690) (8,368) 6,578 324,
Slide 16: Statement of operations for the three months ended September 30, 2022
Statement of operations for the three months ended September 30, 2022 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated V alue Fund BOF-C Colorado Fund Other Burford-only Revenues Capital provision income/(loss) (22,579) 6,138 (11,090) 12,070 95 31 (15,335) (Less
Slide 17: Statement of operations for the nine months ended September 30, 2023
Statement of operations for the nine months ended September 30, 2023 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated V alue Fund BOF-C Colorado Fund Other Burford-only Revenues Capital provision income/(loss) 1,016,113 (1,052) (84,429) (235,731) (20,373) 1,874
Slide 18: Statement of operations for the nine months ended September 30, 2022
Statement of operations for the nine months ended September 30, 2022 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated V alue Fund BOF-C Colorado Fund Other Burford-only Revenues Capital provision income/(loss) 153,166 3,861 (85,265) 12,568 (223) (3,665) 80,442 (
Slide 19: Statement of financial position at September 30, 2023
Statement of financial position at September 30, 2023 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated V alue Fund BOF-C Colorado Fund Other Burford-only Assets Cash and cash equivalents 255,568 (729) (8,498) (2) (1,602) (4,709) 240,028 Marketable securities 107
Slide 20: Statement of financial position at December 31, 2022
Statement of financial position at December 31, 2022 Elimination of third-party interests Strategic Advantage ($ in thousands) Consolidated V alue Fund BOF-C Colorado Fund Other Burford-only Assets Cash and cash equivalents 107,658 (1,906) (7,003) (20) (23,635) (1,415) 73,679 Marketable securities 1
Slide 21: Supplementary data
Supplementary data [Burford
Slide 22: Favorable asymmetric returns by ROIC
Burford-only concluded (fully and partially) capital provision-direct assets arrayed by ROIC Favorable asymmetric From inception through September 30, 2023 ($ in millions) returns 0% or less 0 to 99% 100 to 199% Greater than 200% ROIC ROIC ROIC ROIC Total Realized Realized Realized Realized Realized
Slide 23: Weighted average life (WAL) of concluded portfolio
Weighted average life (WAL) of concluded portfolio Burford-only WAL of fully and partially concluded capital provision-direct portfolio From inception through period end ($ in millions, WAL in years) 2.5 2.4 2.3 2.3 2.3 2.3 2.1 2,485 1.9 1.9 2,211 1.7 1,861 1,597 1,260 2019 2020 2021 2022 3Q23 Cumul
Slide 24: Selected portfolio metrics
Selected portfolio metrics • Fair value of Burford-only Selected portfolio metrics Burford-only September 30, 2023 December 31, 2022 $ change % change capital provision-direct assets ($ in thousands) increased $702 million to $3.3 Deployed cost 1,644,661 1,486,150 158,511 11% billion at September 30
Slide 25: Reconciliations
Reconciliations [Burford
Slide 26: Reconciliations for cash receipts
Reconciliations for cash receipts Cash receipts reconciliation Nine months ended September 30, Y ear ended Dec ember 31, ($ in thousands) 2023 2022 2022 2021 Consolidated proc eeds from c apital provision assets 440,154 282,322 387,786 396,415 Less: Elimination of third-party interests (94,587) (70,
Slide 27: Reconciliations for book value and tangible book value per ordinary share
Reconciliations for book value and tangible book value attributable to BCL per ordinary share Book value and tangible book value attributable to Burford Capital Limited per ordinary share reconciliations At ($ in thousands, except share data) September 30, 2023 December 31, 2022 Total Burford Ca pi
Slide 28: Capital provision income
Capital provision income Three months ended September 30, 2023 (GAAP) (Non-GAAP) Burford-only Elimination of Capital Capital third-party Burford-only provision- provision- ($ in thousands) Consolidated interests total direc t indirec t Realized gains/(losses) relative to cost 37,566 (7,440) 30,126 2
Slide 29: Capital provision income (continued)
Capital provision income (continued) Nine months ended September 30, 2023 (GAAP) (Non-GAAP) Burford-only Elimination of Capital Capital third-party Burford-only provision- provision- ($ in thousands) Consolidated interests total direc t indirec t Realized gains/(losses) relative to cost 171,331 (46,
Slide 30: Asset management income
Asset management income Asset management income Three months ended September 30, 2023 Three months ended September 30, 2022 (GAAP) (Non-GAAP) (GAAP) (Non-GAAP) Elimination of Elimination of third-party third-party ($ in thousands) Consolidated interests Burford-only Consolidated interests Burford-on
Slide 31: Capital provision income, excluding YPF-related income reconciliation
Capital provision income, excluding YPF-related income reconciliation Capital provision income, excluding YPF-related income Nine months ended September 30, 2023 2022 Elimination of Elimination of third-party Burford-only third-party Burford-only ($ in thousands) Consolidated interests total Consoli
Slide 32: Capital provision-direct realizations and deployments and ROTE
Capital provision-direct realizations and deployments and ROTE Reconciliation of cumulative realizations from concluded or partially concluded assets ROTE1 from capital provision-direct assets since inception - consolidated to Burford-only September 30, 2023 ($ in thousands) Eliminations and Net inc
Slide 33: Consolidated portfolio to Group-wide portfolio
Consolidated portfolio to Group-wide portfolio Reconciliation from consolidated portfolio to Group-wide portfolio September 30, 2023 December 31, 2022 December 31, 2021 December 31, 2020 Consolidated fair value 4,894,648 3,735,556 3,117,263 2,714,314 Consolidated undrawn commitments 1,811,824 1,720,
Slide 34: Liquidity
Liquidity Reconciliation of consolidated to Burford only cash and cash equivalents and marketable securities Elimination of third-party Consolidated interests Burford-only At September 30, 2023 Cash and cash equivalents 256 (16) 240 Marketable Securities 107 - 107 Total cash and cash equivalents and
Slide 35: Covenant calculations at September 30, 2023 and December 31, 2022
Covenant calculations at September 30, 2023 and December 31, 2022 From the condensed consolidated statement of financial position and note 9, Debt From the condensed consolidated statement of financial position and note 9, Debt September 30, 2023 Dec ember 31, 2022 September 30, 2023 Dec ember 31, 2
Slide 36: [Burford
[Burford