Burford Capital Limited · LSE:BUR
Burford Capital — Q3 2024 Earnings Presentation
40 slides from Burford Capital's earnings presentation, Nov 7, 2024
Slide 1: Third Quarter 2024 Financial Results
November 7, 2024 Burford Capital Third Quarter 2024 Financial 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: Notice & disclaimer (continued)
Notice & disclaimer (continued) Basis of presentation; non-GAAP financial measures; alternative performance measures; definitions. The Company reports its financial results in accordance with the generally accepted accounting principles in the United States (“US GAAP”). US GAAP requires the Company
Slide 4: Burford 3Q24 performance at a glance
Burford 3Q24 performance at a glance ❑ Core portfolio realizations of $165 million more than doubled compared to 3Q23 Selected financial results Three months ended September 30, 2024 demonstrating the momentum of the portfolio Burford-only Total revenues $226m ❑ Strong profit monetization trends con
Slide 5: Group-wide portfolio of $7.5 billion continues to scale while generating attractive cash flows
Group-wide portfolio of $7.5 billion continues to scale while generating attractive cash flows Realizations are on a record annual pace in 2024 • Core portfolio realizations of $380 million in YTD24 up 39% compared to YTD23 and diversified across 40 assets • We continue to see progress in clearing t
Slide 6: Net income in 3Q24 accelerated relative to the first half of the year
Net income in 3Q24 Nine months ended September 30, Three months ended September 30, accelerated relative to the first half of the year Selected statement of operations data 2024 2023 % change 2024 2023 % change Burford-only ($ in thousands, except per share data) • 3Q24 net income attributable to Bu
Slide 7: Strong quarter for capital provision income, up significantly from prior year ex-YPF impact
Strong quarter for capital provision income, which is up Nine months ended September 30, Three months ended September 30, significantly from prior year ex-YPF impact Capital provision income Burford-only 2024 2023 % change 2024 2023 % change • Burford-only net realized gains ($ in thousands, except
Slide 8: New commitments and deployments remain solid and supportive of portfolio growth
New commitments and Total new commitments Group-wide - capital provision-direct deployments remain solid and ($ in millions) 587 552 supportive of portfolio growth 138 106 444 398 113 • 3Q24 Burford-only capital 335 72 310 provision-direct new commitments 64 74 of $101 million and deployments of 448
Slide 9: Realizations continued to accelerate in 3Q24 putting the year on a record pace
Realizations continued to Realizations Burford-only - capital provision-direct accelerate in 3Q24 putting ($ in millions) 380 the year on a record pace 274 • Burford-only capital provision- 222 direct realizations: 155 165 157 133 – $165 million in 3Q24, up 108% 123 from 3Q23 62 79 61 – $380 million
Slide 10: Burford has generated strong cash-on-cash returns
Burford has generated strong cash-on-cash returns • Burford has generated consistently high returns on $3.1 billion of realizations since inception in 2009 through September 30, 2024 • Strong returns on realizations in YTD24 drove an increase in the cumulative ROIC since inception from 82% to 84%, w
Slide 11: Favorable asymmetric returns
Burford-only concluded (fully and partially) capital provision-direct assets arrayed by ROIC Favorable asymmetric From inception through September 30, 2024 ($ 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 12: We believe YPF-related assets have the potential to create considerable upside
We believe YPF-related assets have the potential to create considerable upside • Final judgment a complete win against Argentina of $16 billion, at the high end of the possible range of damages • Judgment incurs post-judgment interest at a rate of 5.42% compounding annually • Argentina has appealed
Slide 13: Overview of YPF-related assets' entitlement & accounting
Overview of YPF-related assets’ entitlement & accounting Total JUDGMENT COMPONENTS • Burford’s net entitlement is around 35% of proceeds from judgment value of the Petersen case and around 73% of proceeds from the Eton Park case, or in the aggregate around 40% of the total $17.0 Post-Judgment Intere
Slide 14: Asset management income makes a continued contribution
Asset management income Asset management income Burford-only makes a continued ($ in millions) 64 contribution 56 • Burford-only asset management 41 income was $29 million in YTD24, 29 56 29 47 down from $41 million in YTD23, 35 driven primarily by lower income 12 23 from BOF-C 6 2 2 11 • Fair value
Slide 15: Total operating expenses continue to track lower compared to the prior year
Total operating expenses continue to track lower Nine months ended September 30, Three months ended September 30, compared to the prior year Total operating expenses Burford-only ($ in thousands) 2024 2023 2024 2023 • Total operating expenses of $113 million in YTD24 are down $37 million Compensatio
Slide 16: Robust liquidity and low leverage
YTD24 cash bridge Maturity of debt outstanding Robust liquidity and low Burford-only ($ in millions) ($ in millions) leverage 152 89 675 19 274 556 WAL of debt: 4.7 years 903 WAL of capital provision-direct assets: 2.5 years 1 • Liquidity of $629 million on a Burford-only basis at September 30, 629
Slide 17: 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 • Market leadership1 and significant scale enabled three years in a row since inception through September 30, 2024 of $3.1 billion with (2021-23) of m
Slide 18: Financial results
Financial results [Burford
Slide 19: Statement of operations for the three months ended September 30, 2024
Statement of operations for the three months ended September 30, 2024 Elimination of third-party interests Advantage ($ in thousands) Consolidated BOF-C Colorado Fund Other Burford-only Revenues Capital provision income/(loss) 270,988 (18,742) (34,546) (10,257) (2,482) 204,961 Plus/(Less): Third-par
Slide 20: 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 Value Fund BOF-C Colorado Fund Other Burford-only Revenues Capital provision income/(loss) 504,513 (845) (36,193) (140,690) (8,368) 6,578 324,9
Slide 21: Statement of operations for the nine months ended September 30, 2024
Statement of operations for the nine months ended September 30, 2024 Elimination of third-party interests Advantage ($ in thousands) Consolidated BOF-C Colorado Fund Other Burford-only Revenues Capital provision income/(loss) 469,494 (51,760) (47,372) (23,302) (4,836) 342,224 Plus/(Less): Third-part
Slide 22: 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 Value 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 6
Slide 23: Statement of financial position at September 30, 2024
Statement of financial position at September 30, 2024 Elimination of third-party interests Advantage ($ in thousands) Consolidated BOF-C Colorado Fund Other Burford-only Assets Cash and cash equivalents 574,014 (10,857) (5) (1,086) (8,908) 553,158 Marketable securities 75,801 - - - - 75,801 Other as
Slide 24: Statement of financial position at December 31, 2023
Statement of financial position at December 31, 2023 Elimination of third-party interests Advantage ($ in thousands) Consolidated BOF-C Colorado Fund Other Burford-only Assets Cash and cash equivalents 220,549 (15,703) (27) (2,503) (6,401) 195,915 Marketable securities 107,561 - - - - 107,561 Other
Slide 25: Reconciliations
Reconciliations [Burford
Slide 26: Consolidated portfolio to Group-wide portfolio
Consolidated portfolio to Group-wide portfolio September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 December 31, 2022(1) December 31, 2021(2) December 31, 2020(3) Consolidated carrying value 5,356,300 5,238,633 5,096,807 5,045,388 3,735,556 3,117,263 2,714,314 Consolidated undrawn commi
Slide 27: Reconciliations for cash receipts
Reconciliations for cash receipts For the three months ended ($ in thousands) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Consolidated proceeds from capital provision assets 395,943 125,344 247,561 119,208 132,147 163,522 144,485 105,464 173,781 Plus/(Less): Elimination o
Slide 28: Reconciliations for cash receipts and due from settlement of capital provision assets
Reconciliations for cash receipts and due from settlement of capital provision assets Nine months ended September 30, Elimination of ($ in thousands) 2024 2023 third-party Consolidated proceeds from capital provision assets 768,848 440,154 ($ in thousands) Consolidated interests Burford-only Due fro
Slide 29: Capital provision-direct deployments and realizations
Capital provision-direct deployments and realizations Reconciliation of capital provision-direct deployments - consolidated to Group-wide For the three months ended Eliminations and ($ in thousands) Consolidated adjustments Burford-only Other funds BOF-C Group-wide September 30, 2024 88,769 (16,492)
Slide 30: Tangible book value attributable to Burford Capital Limited per ordinary share
Tangible book value attributable to Burford Capital Limited per ordinary share Tangible book value attributable to Burford Capital Limited per ordinary share reconciliation ($ in thousands, except share data) September 30, 2024 December 31, 2023 Total Burford Capital Limited equity 2,432,109 2,290,8
Slide 31: Covenant calculations at September 30, 2024 and December 31, 2023
Covenant calculations at September 30, 2024 and December 31, 2023 Consolidated net debt to consolidated tangible assets ratio calculation ($ in thousands) September 30, 2024 December 31, 2023 Total principal amount of debt outstanding(1) 1,814,459 1,563,073 Less: Cash and cash equivalents (574,014)
Slide 32: YPF-related income
YPF-related income Capital provision income, excluding YPF-related assets reconciliation For the three months ended September 30, 2024 For the three months ended September 30, 2023 Elimination of Elimination of third-party third-party ($ in thousands) Consolidated interests Burford-only Consolidated
Slide 33: YPF-related fair value and realizations
YPF-related fair value and realizations YPF fair value - reconciliation of consolidated to Burford-only September 30, 2024 Elimination of third-party ($ in thousands) Consolidated interests Burford-only Capital provision assets 5,356,300 (1,703,073) 3,653,227 Deployed cost 2,377,874 (701,294) 1,676,
Slide 34: Asset management income
Asset management income Asset management income Three months ended September 30, 2024 Three months ended September 30, 2023 Nine months ended September 30, 2024 Nine months ended September 30, 2023 Elimination of Elimination of Elimination of Elimination of third-party third-party third-party third-
Slide 35: Undrawn commitments
Undrawn commitments September 30, 2024 Elimination of third-party ($ in thousands) Consolidated interests Burford-only Definitive 931,730 (204,768) 726,962 Discretionary 1,011,019 (220,307) 790,712 Total legal finance undrawn commitments 1,942,749 (425,075) 1,517,674 Legal risk (definitive) 44,451 -
Slide 36: Total portfolio at September 30, 2024
Total portfolio at September 30, 2024 September 30, 2024 Elimination of third-party ($ in thousands) Consolidated interests Burford-only Other funds BOF-C Group-wide Capital provision assets - direct Deployed cost 2,172,043 (526,376) 1,645,667 362,230 459,211 2,467,108 Plus: Fair value adjustments 2
Slide 37: Total portfolio at December 31, 2023
Total portfolio at December 31, 2023 December 31, 2023 Elimination of third-party ($ in thousands) Consolidated interests Burford-only Other funds BOF-C Group-wide Capital provision assets - direct Deployed cost 2,116,304 (542,773) 1,573,531 416,318 428,110 2,417,959 Plus: Fair value adjustments 2,7
Slide 38: Capital provision income reconciliations
Capital provision income reconciliations Three months ended September 30, 2024 Burford-only Elimination of Capital Capital third-party Burford-only provision- provision- ($ in thousands) Consolidated interests total direct indirect Net realized gains/(losses) 86,940 (30,450) 56,490 56,257 233 Fair v
Slide 39: Capital provision income reconciliations
Capital provision income reconciliations Nine months ended September 30, 2024 Burford-only Elimination of Capital Capital third-party Burford-only provision- provision- ($ in thousands) Consolidated interests total direct indirect Net realized gains/(losses) 262,273 (76,736) 185,537 184,164 1,373 Fa
Slide 40: [Burford
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