Burford Capital Limited · LSE:BUR
Burford Capital — H1 2018 Earnings Presentation
18 slides from Burford Capital's earnings presentation, Jul 25, 2018
Slide 1: Investor Presentation 1H 2018 Results
INVESTOR PRESENTATION 1H 2018 RESULTS 25 JULY 2018 This presentation is for the use of Burford’s public shareholders and is not an offering of any Burford private fund.
Slide 2: Burford delivered another record-breaking first half
Highlights Burford delivered another record-breaking first half Income up 17% Profit after tax up 17% Cash generation up 61% Total assets up 37% Unless otherwise specifically indicated, financial and operational data provided throughout this presentation are as of 30 June 2018 or for the first half
Slide 3: Burford is the largest direct investor and largest investment fund manager in legal finance
Company overview Burford is the largest direct investor AND the largest investment fund manager in the legal finance sector • Founded in 2009, Burford is a leading provider of finance to the legal market • Burford has $3.3 billion of assets invested in and available for legal and $3.3B regulatory ri
Slide 4: Continued strong growth in reported media coverage reflects the increasing importance of litigation finance
Greater market activity Continued strong growth in reported media coverage reflects the increasing importance of litigation finance • Growth trajectory of legal media coverage remains steep – there was as much media coverage in the first half of 2018 as in all of 2017 • Users and prospective users a
Slide 5: 75% of law firms that had a single case financed by Burford later brought us another investment
Single case financing a gateway to growth 75% of law firms that had a single case financed by Burford later brought us another investment opportunity • Single cases are often the entry level product in our business, the first step in establishing a new relationship with a law firm By building those
Slide 6: Core litigation finance commitments nearly doubled over the same period last year
Continued growth in new commitments Core litigation finance commitments nearly doubled over the same period last year Balance Sheet Investment Funds Total % Change ($ in millions) Commitments Commitments Commitments PoP $33.2 10% $54.3 26% $87.5 Single case finance Binary legal risk on a single clai
Slide 7: Burford's balance sheet portfolio of investments exceeds $1.7 billion
Large and widely diversified investment portfolio Burford’s balance sheet portfolio of investments exceeds $1.7 billion • 900+ claims underlie 89 ongoing investments in • Historically, 65% of our total investment income has not more than 30 different states and countries been recognised until the in
Slide 8: Positive appellate decision in the Petersen matter
Petersen / YPF Positive appellate decision in the Petersen matter • Burford has for some time been financing litigation brought by YPF’s second-largest shareholder, the Petersen Group, against Argentina and YPF, and the period saw developments in this litigation • The procedural posture of the case
Slide 9: Burford acquires a further 70% interest in Eton Park's entitlement
Petersen / YPF Burford acquires a further 70% interest in Eton Park’s entitlement maintaining our cash exposure by selling another 3.75% of our Petersen entitlement at an $800 million valuation Eton Park Petersen • Burford has historically provided litigation • To hold Burford’s cash exposure to the
Slide 10: New asset recovery business model underpinning significant investment growth
Asset recovery and insurance New asset recovery business model underpinning significant investment growth Asset recovery • Significant level of investment activity in period led to $49 million of new investment commitments, 11x prior period (1H 2017) • Business model change to at-risk provision of s
Slide 11: Availability of fund capital has enabled Burford's continued growth
Investment management business Availability of fund capital has enabled Burford’s continued growth • Burford is the largest investment manager in our sector • Significant trial win in Partners III investment could generate more than $100 million in fund recovery and more than $20 million in performa
Slide 12: Burford's robust cash generation covered investment deployments, operating expenses and financing costs
Cash availability for commitments Burford’s robust cash generation covered investment deployments, operating expenses and financing costs during the period 12
Slide 13: As Burford grows it continues to consider its optimal capital structure
Capitalizing the business for future growth As Burford grows it continues to consider its optimal capital structure INTERNALLY GENERATED CAPITAL EFFICIENT DEBT FINANCING GREATER FLEXIBILITY Recycling and secondary market Low-cost, long-term debt is an Investment fund and other sources of capital eff
Slide 14: Appendix
| Burford Appendix
Slide 15: Multiple levels of risk oversight at the enterprise level and within business units
Risk management & monitoring Multiple levels of risk oversight at the enterprise level and within business units PORTFOLIO RISK MANAGEMENT STRUCTURAL OVERSIGHT AT MULTIPLE LEVELS Burford approaches litigation as it would any other investable Investment Committee (Weekly) asset class, by examining at
Slide 16: Firm-wide dedication to risk management, internal controls, and compliance
Operational infrastructure Firm-wide dedication to risk management, internal controls, and compliance INTERNAL CONTROLS EXTERNAL CONTROLS • Under the direction of the Chief Compliance Officer, Burford • Manager of third-party capital has been a registered maintains a comprehensive compliance program
Slide 17: Notice and disclaimer
Notice and disclaimer This presentation (“Presentation”) does not constitute or form part of, and should not be construed as, an issue for sale or subscription of, or solicitation of any offer or invitation to subscribe for, underwrite or otherwise acquire or dispose of any securities of Burford Cap
Slide 18: | Burford
| Burford