Burford Capital Limited · LSE:BUR
Burford Capital — H1 2021 Earnings Presentation
19 slides from Burford Capital's earnings presentation, Sep 9, 2021
Slide 1: Burford Capital Interim 2021 results
SEPTEMBER 9, 2021 Burford Capital Interim 2021 results This presentation does not constitute an offer to sell or the solicitation of an offer to buy any Burford fund.
Slide 2: Notice & disclaimer
Notice & disclaimer This Presentation provides certain information to facilitate review and understanding about the business, operations and results of Burford Capital Limited (the “Company”) during the six-months ended June 30, 2021, and does not purport to be a complete description of the Company’
Slide 3: Growth accelerates, significant liquidity
Growth in new commitments Increased returns Capital provision-direct Capital provision-direct cumulative recoveries since inception Growth accelerates, Group-wide Burford-only significant liquidity ($ in millions) 503 ($ in millions) 88% 92% 95% 465 80% • Burford-only 1H 2021 results: 118 75% 1,738
Slide 4: New commitments and deployments recovered to pre-pandemic levels
Group-wide new commitments and deployments New commitments and Capital provision-direct ($ in millions) deployments recovered to 503 490 pre-pandemic levels 465 453 406 333 • In 1H 2021, new commitments and 398 deployments increased strongly to 336 335 pre-pandemic levels 247 218 116 - Higher origin
Slide 5: Portfolio growth in 1H 2021 driven by increase in new business
Portfolio growth in 1H 2021 driven by increase in new business • Portfolio1 grew to $4.8 billion, reflecting significant increase in new business notwithstanding realizations in the period − Group-wide capital provision-direct new commitments up 334% from 1H 2020 − Creates opportunity for future cap
Slide 6: US GAAP conversion & change in expense accruals
US GAAP conversion & change in expense accruals US GAAP • We will remain a foreign private issuer (FPI) for US purposes in 2022 • We may well nonetheless proceed with our conversion to US GAAP - Board will make a decision on that issue at its October meeting • We would report under US GAAP beginning
Slide 7: Realizations improved from 2H 2020 but were impacted by Covid-related delays to case progress
Realizations improved from 2H 2020 but were impacted by Covid-related delays to case progress • Group-wide capital provision-direct realizations down 67% from 1H 2020 but up 36% from 2H 2020 − Realized losses decreased to 0.5% of 1H 2021 average capital provision-direct assets at cost, down from 2.1
Slide 8: Limited range of legal outcomes leads to favorable recovery dynamics
Limited range of legal outcomes leads to favorable recovery dynamics Legal finance life cycle Burford-only capital provision-direct assets—fully and partially concluded portfolio ($ in millions) Total ADJUDICATION-GAINS 30% ($270) of deployments $939 49% IRR go to adjudication and win in Recoveries
Slide 9: Asymmetric returns on adjudications drive high total returns
Concluded assets arrayed by ROIC since inception Burford-only capital provision-direct—fully and partially concluded portfolio Asymmetric returns on ($ in millions) adjudications drive high A B C D Total total returns 0% or less 0 to 99% 100 to 199% Greater than 200% $1,738 recovered ROIC ROIC ROIC
Slide 10: Liquidity at all-time high
Liquidity at all-time high AT JUNE 30: • Burford had a record $430 million of cash assets at period end, boosted by issuance of $400 million of senior notes due 2028 - Does not include $103 million due from settlement receivable balance at June 30, 2021, collected in July - Cash management assets co
Slide 11: Cash receipts from capital provision-direct improved from 1H 2020
Cash receipts from capital provision-direct improved from 1H 2020 despite quiet period for realizations • Burford generated $63 million of cash receipts on its balance sheet 1H 2021 cash receipts Burford-only - Quiet period for realizations, with collection of $103 million receivable ($ in millions)
Slide 12: Conservative debt structure and relatively low leverage
Conservative debt structure and relatively low leverage • Debt maturities are considerably longer than the weighted average lives of • Burford maintains relatively low levels of leverage, well below the concluded capital provision-direct assets requirements of our debt covenants • Issued $400 millio
Slide 13: 1H 2021 unrealized gains more than offset by transfers of previously recognized fair value gains
1H 2021 unrealized gains more than offset by transfers of previously recognized fair value gains to realized Unrealized gains during 1H 2021 History of fair value adjustment on capital provision assets Burford-only • Capital provision-direct unrealized gains of $12 million were ($ in millions) more
Slide 14: Solid asset management income, strong BOF-C growth
Asset management income Burford-only Solid asset management ($ in millions) income, strong BOF-C growth 12 11 • Asset management income increased 1 1 8 50% from 1H 2020 to $12 million, 7 mainly due to growth in income from 2 BOF-C 9 - BOF-C income represented more than 6 5 50% of asset management in
Slide 15: Portfolio strength, return to growth and strong liquidity point to significant opportunity
Portfolio strength, return to growth and strong liquidity point to significant opportunity for Burford Record-breaking levels of new business Recent vintages driving recent realizations Cumulative returns on concluded cases rose to an ROIC of 95% Liquidity at an all-time high Profit after tax, adjus
Slide 16: Supplementary data
Supplementary data {Burford
Slide 17: Statement of comprehensive income for the six months ended June 30, 2021
Statement of comprehensive income for the six months ended June 30, 2021 Elimination of * The eliminated amounts arise from the services ($ in thousands) Consolidated third-party Burford-only provided by the Group to the consolidated entities as investment manager and the Group’s investment as a int
Slide 18: Financial position for the six months ended June 30, 2021
Financial position for the six months ended June 30, 2021 * The eliminated amounts arise from the services provided by the Elimination of Group to the consolidated entities as investment manager and the Consolidated third-party Burford-only Group’s investment as a limited partner in consolidated ent
Slide 19: [Burford
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