Burford Capital Limited · LSE:BUR
Burford Capital — Q1 2024 Earnings Presentation
33 slides from Burford Capital's earnings presentation, May 13, 2024
Slide 1: First Quarter 2024 Financial Results
May 13, 2024 Burford Capital First 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 performance at a glance
Burford performance at a glance ❑ Strong cash receipts and good realizations, while revenue reflected the variable Selected financial results timing we expect in our business Three months ended March 31, 2024 Burford-only ❑ Burford-only cash receipts of $138 million, portfolio activity continues to
Slide 5: Group-wide total portfolio steady at more than $7 billion
Group-wide total portfolio steady at more than $7 billion Realizations continued at brisk post-Covid-19 pandemic pace • Burford-only capital provision-direct realizations of $61 million in 1Q24 were sustained at 1Q23’s level, Group-wide total portfolio reflecting elevated resolution frequency amid n
Slide 6: 1Q24 new commitments and deployments in line with typical first quarter levels
1Q24 new commitments and Total new commitments Group-wide - capital provision-direct deployments in line with ($ in millions) typical first quarter levels 444 398 1 1 113 • Burford-only capital provision- 311 72 310 3 direct deployments were $59 60 64 million in 1Q24, with ~50% coming from 2023 vint
Slide 7: Realizations sustained at brisk post-Covid-19 pandemic pace in 1Q24
Realizations sustained at Realizations Burford-only - capital provision-direct brisk post-Covid-19 ($ in millions) 222 pandemic pace in 1Q24 • Burford-only capital provision- 157 123 133 direct realizations of $61 million in 1Q24 reflected continuing elevated resolution frequency 79 62 61 rate post-
Slide 8: 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 • Argentina has appealed to the Second Circuit Court of Appeals • Fair value of YPF-related assets of $1.4
Slide 9: Burford has generated strong cash-on-cash returns
Burford has generated strong cash-on-cash returns • Burford has generated consistently high returns on $2.8 billion of realizations since inception in 2009 through March 31, 2024 • A recurring mix of settlements and wins drives strong returns in reasonable time frames, with asymmetrically low losses
Slide 10: Favorable asymmetric returns
Burford-only concluded (fully and partially) capital provision-direct assets arrayed by ROIC Favorable asymmetric From inception through March 31, 2024 ($ 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 Dep
Slide 11: Portfolio case development progressing well, with timing of revenue recognition variable
Portfolio case development progressing well, with Three months ended March 31, timing of revenue recognition variable as Selected statement of operations data 2024 2023 % change expected in our business Burford-only ($ in thousands, except per share data) Capital provision income 17,903 316,015 -94%
Slide 12: Burford-only realized gains of $30 million reflects continued solid portfolio monetization
Burford-only realized gains of $30 million reflects continued solid portfolio Three months ended March 31, monetization trends • Realized gains in 1Q24 comprised $45 million of gross realized gains (higher Capital provision income than $39 million in 1Q23), which were Burford-only 2024 2023 % change
Slide 13: Asset management income primarily driven by reduced BOF-C activity
Asset management income Asset management income Burford-only primarily driven by reduced ($ in millions) 64 BOF-C activity 56 • Burford-only asset management income of $7 million in 1Q24, with the decrease 29 47 56 from 1Q23 due primarily to reduced 12 19 BOF-C activity - European waterfall structur
Slide 14: Burford-only total operating expenses normalized in 1Q24
Three months ended March 31, Burford-only total operating Total operating expenses expenses normalized in 1Q24 Burford-only ($ in thousands) 2024 2023 as compared to 1Q23 in the absence of elevated variable Compensation and benefits costs Salaries and benefits 11,664 12,492 • 1Q23 total compensation
Slide 15: Robust liquidity and low leverage
1Q24 cash bridge Maturity of debt outstanding Robust liquidity and low Burford-only ($ in millions) ($ in millions) leverage 254 59 68 675 636 WAL of debt: 5.2 years 568 WAL of capital provision-direct assets: 2.4 years 1 138 275 • Liquidity of $568 million on a Burford-only basis at March 31, 2024
Slide 16: 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 a third year in a row since inception through March 31, 2024 of $2.8 billion with an (2021-23) of m
Slide 17: Financial results
Financial results [Burford
Slide 18: Statement of operations for the three months ended March 31, 2024
Statement of operations for the three months ended March 31, 2024 Elimination of third-party interests Advantage ($ in thousands) Consolidated BOF-C Colorado Fund Other Burford-only Revenues Capital provision income/(loss) 40,761 (9,686) (5,420) (7,271) (481) 17,903 Plus/(Less): Third-party interest
Slide 19: Statement of operations for the three months ended March 31, 2023
Statement of operations for the three months ended March 31, 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) 475,933 (107) (48,308) (99,769) (7,022) (4,712) 316,015
Slide 20: Statement of financial position at March 31, 2024
Statement of financial position at March 31, 2024 Elimination of third-party interests Advantage ($ in thousands) Consolidated BOF-C Colorado Fund Other Burford-only Assets Cash and cash equivalents 482,673 (7,644) (15) (2,799) (7,517) 464,698 Marketable securities 102,873 - - - - 102,873 Other asse
Slide 21: 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 22: Reconciliations
Reconciliations [Burford
Slide 23: Consolidated portfolio to Group-wide portfolio
Consolidated portfolio to Group-wide portfolio Consolidated portfolio to Group-wide reconciliation March 31, 2024 December 31, 2023 December 31, 2022(1) December 31, 2021(2) December 31, 2020 Consolidated fair value 5,096,807 5,045,388 3,735,556 3,117,263 2,714,314 Consolidated undrawn commitments 1
Slide 24: Reconciliations for cash receipts
Reconciliations for cash receipts For the three months ended ($ in thousands) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Consolidated proceeds from capital provision assets 247,561 119,208 132,147 163,522 144,485 105,464 173,781 39,172 69,369 Plus/(Less): Elimination of
Slide 25: 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 March 31, 2024 74,790 (15,710) 59,
Slide 26: Tangible book value per ordinary share and liquidity reconciliations
Tangible book value attributable to Burford Capital Limited per ordinary share and liquidity reconciliations Tangible book value attributable to Burford Capital Limited per ordinary share reconciliation ($ in thousands, except share data) March 31, 2024 December 31, 2023 Total Burford Capital Limite
Slide 27: Covenant calculations at March 31, 2024 and December 31, 2023
Covenant calculations at March 31, 2024 and December 31, 2023 Consolidated net debt to consolidated tangible assets ratio calculation Consolidated indebtedness to Net Tangible Equity Ratio calculation ($ in thousands) March 31, 2024 December 31, 2023 ($ in thousands) March 31, 2024 December 31, 2023
Slide 28: YPF-related income, fair value and realizations
YPF-related income, fair value and realizations Capital provision income, excluding YPF-related assets reconciliation For the three months ended March 31, 2024 For the three months ended March 31, 2023 Elimination of Elimination of third-party third-party ($ in thousands) Consolidated interests Burf
Slide 29: Asset management income
Asset management income Asset management income Three months ended March 31, 2024 Three months ended March 31, 2023 Elimination of Elimination of third-party third-party ($ in thousands) Consolidated interests Burford-only Consolidated interests Burford-only Management fee income 1,863 - 1,863 1,997
Slide 30: Undrawn commitments
Undrawn commitments Elimination of third-party ($ in thousands) Consolidated interests Burford-only Definitive 757,453 (185,358) 572,095 Discretionary 1,008,144 (222,580) 785,564 Total legal finance undrawn commitments 1,765,597 (407,938) 1,357,659 Legal risk (definitive) 54,483 (5,922) 48,561 Total
Slide 31: Capital provision assets
Capital provision assets Capital provision asset consolidated to Burford-only reconciliation Burford-only Elimination of Capital Capital third-party provision- provision- ($ in thousands) Consolidated interests Burford-only direct indirect Fair value at March 31, 2024 5,096,807 (1,654,930) 3,441,877
Slide 32: Capital provision income reconciliations
Capital provision income reconciliations Three months ended March 31, 2024 Burford-only Elimination of Capital Capital third-party provision- provision- ($ in thousands) Consolidated interests Burford-only direct indirect Net realized gains/(losses) 57,862 (27,968) 29,894 28,754 1,140 Fair value adj
Slide 33: [Burford
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