Burford Capital Q2 2025 Earnings Report

Burford Capital EPS Results

• Actual EPS: $0.39
• Consensus EPS: $0.33
• Beat/Miss: Beat by +$0.06
• One Year Ago EPS: N/A

Burford Capital Revenue Results

• Actual Revenue: $191.29 million
• Expected Revenue: $159.02 million
• Beat/Miss: Beat by +$32.27 million
• YoY Revenue Growth: N/A

Burford Capital Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 9:00AM ET

Burford Capital (NYSE:BUR) provides legal finance products and services worldwide. The company operates through two segments, Capital Provision, and Asset Management and Other Provision. The Capital Provision segment provides capital to the legal industry or in connection with legal matters directly and through investment in private funds; legal risk management services; lower risk legal finance business focusing on pre-settlement litigation matters with lower risk and lower expected returns; post-settlement finance; and complex strategies in which it acts as a principal and acquires assets that are mispriced. The Asset Management and Other Services segment provides services to the legal industry, including litigation insurance. Burford Capital Limited was incorporated in 2009 and is based in Saint Peter Port, Guernsey.

Burford Capital Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: New business commitments in Q2 reached the highest quarterly level in years, up 71% year-to-date versus 2024, reflecting strong demand and Burford’s global footprint.
• Positive Sentiment: Financial performance delivered a fivefold increase in net income year-to-date compared to 2024, with revenues up across the board and operating expenses stabilizing.
• Positive Sentiment: A $500 million debt issuance was executed in under 24 hours with record-tight pricing and new debt investors, strengthening Burford’s competitive cost of capital.
• Positive Sentiment: Liquidity remained robust at quarter end with $440 million in cash (pre-issuance), $306 million in cash receipts year-to-date versus $245 million last year, and $118 million in receivables.
• Neutral Sentiment: YPF litigation progressed with an October oral argument date set in the Second Circuit and a New York court granting a turnover order for Argentina’s YPF shares, now under appeal.

Presentation

[Operator]

Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to Burford Capital's Second Quarter twenty twenty five Financial Results Conference Call or Audio Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer I would now like to turn the conference over to Josh Wood, Head of Investor Relations at Hartford. You may begin.

[Josh Wood, Head - IR at Burford Capital]

Thank you, Bella, and good morning, everyone. We hope you've all been enjoying a nice summer, and we appreciate you joining us today to discuss Burford's second quarter results. On the call, we have our Chief Executive Officer, Chris Bogart our Chief Investment Officer, John Melo and our Chief Financial Officer, Jordan Leach. Earlier this morning, we posted a detailed earnings presentation, which we'll refer to during the call and also filed our Form 10 Q, both of which you can find on our Investor Relations website. Before we get started, just a reminder that today's call may contain forward looking statements that involve certain risks, uncertainties and other factors that could cause actual results to differ materially from those discussed during the call.

[Josh Wood, Head - IR at Burford Capital]

For more information regarding these risk factors, please refer to our earnings materials relating to this call posted on our website and our filings with the SEC. We'll also be referring to certain non GAAP financial measures during the call. Please refer to today's earnings materials and our filings with the SEC for additional information, including reconciliations of these non GAAP financial measures to the most directly comparable GAAP measures. And with that, I will turn the call over to Chris.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Thanks very much, Josh, and thanks to everyone for joining us today. It was interesting. Just after the quarter closed, Bloomberg ran a piece entitled Litigation Funder Burford's Week of Big Wins. And the piece opened by saying it's been a good week for Burford Capital. And that was absolutely true for reasons that we'll talk about with you.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

But in fact, it wasn't just a good week. It's been a really good quarter and a really good six months. And I'm on Slide six to take you through a few of the highlights. In terms of new business, we saw a really robust period for new business. The second quarter was significantly higher in terms of new definitive commitments than any period, any quarterly period that we've had for the last couple of years.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And that, if you look at this on a year to date basis, we're up very materially from the comparable 2024 period, up 71%. So that's just showing, I think, the strong demand for our capital out there in the market and our continued ability to make substantial commitments against meaningful pieces of litigation arbitration around the world, and continues to show the benefit of the global footprint, and the incredible team that we have. Looking at the income statement, you know, basically, we were up across the board here on a quarter to quarter basis, on a year to date versus year to date basis, and we've done that sort of throughout the piece. You know, net income, of course, goes up very, very strongly as you saw, five times on a year to date basis compared to 2024, 63% up on the quarter. But it wasn't just net income.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

It was across the piece. So revenues were up. As Jordan will talk about, operating expenses have returned to a run rate stable basis. So we're just very pleased with not only the level of new business that we were able to create, but the financial performance that the existing portfolio has continued to deliver. That financial performance, means that when you look at the combination of new business that we're putting into the portfolio and the performance of the existing assets in the portfolio, which have an impact on the base value of portfolio.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And, again, this isn't a fair value thing. We're talking just about definitive commitments and cost. And you saw that that number was is up 15% year to date. That's actually a higher rate of growth than we need to achieve to be able to meet the targets that we set out, the longer term targets that we set out in the April Investor Day. And then cash kept on coming in the door, from cases, and that's obviously always always a good thing to see.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

So four key messages, four key financial metrics for us, all of which were strong during the course of the quarter and have been strong year to date. I wanna also touch on a couple of other things. First, we were successful shortly after the close of the quarter in going out and raising a new $500,000,000 issuance. We were able to do that with great market support. That deal came together very, very rapidly, not much more than twenty four hours.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

We were able not only to upsize it, but also to price it, more tightly against the against the indices, both treasuries and the and the double b index, than we've ever been successful in before. And that and we had also a lot of new debt investors come into the book. So that was just a very successful offering, and I think it shows the market maturity that we have and the acceptance of the proposition that we have to offer in the market. That gives us a very desirable cost of capital, especially compared to our competitors. And candidly, there's there's nobody else that we compete with in this market who has the ability to access capital like that on that kind of scale, time frame, and pricing.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And finally, no no call would be complete without a reference to YPF. YPF had a fair bit of progress during the course of the quarter. We now have a tentative oral argument date in October for the oral argument of the main appeal. That's been an an item that we've been waiting for for some time, and so it's delightful to see that moving ahead. We've also had not only general progress both in The United States and in other jurisdictions in terms of moving forward with our enforcement activities.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

But we had a specific victory, in New York in that, judge Preska and the Southern District of New York granted, our motion for the turnover of some of Argentina's YPF shares. That, of course, will be the subject of further legal proceedings. It's on appeal as one would expect, but it was nonetheless another, very strong marker of forward progress in the case. I know that that investors always want to hear a lot about YPF, and it's obviously an important part of our story. But at the same time, I hope that you'll continue to understand the constraints on us in terms of talking in detail about our strategy and our assessment of what has happened.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

There's a lot public about YPF happily. So investors really are capable, I think, of of reading themselves into the case at whatever level of detail that they want. This isn't one of these cases where it's very difficult to find out information about what's actually going on. But when we talk about the case, the challenge, of course, is a litigation challenge. You might remember that a couple of quarters ago, I gave a longer version of an update about YPF.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And investors found that helpful, but at the same time, so too did Argentina. And Argentina has now quoted or referred to that about 100 times in court proceedings around the world. And it's just some noise that is probably not desirable. So I think we will continue to keep you abreast of of major developments in the case. But in terms of commentary on the case, we're going to have to leave people to to read themselves in on their own.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And with that, let me turn you over to Jordan to walk through some numbers.

[Jordan Licht, CFO at Burford Capital]

Thank you, Chris, and good morning to everybody. I'm starting off on Slide nine, which gives you the overall combination of our two segments, Principal Finance and Asset Management. First, just looking at the total revenues, you can see a large increase of year to date compared to last year, $280,000,000 versus $168,000,000 in the same period. Bring that all the way down to the bottom line, you can see that our net income has also risen $120 ish million compared to $24,000,000 and earnings per share at $0.53 is close to five times for the same period last year. I'll walk us through the Principal Finance segment next.

[Jordan Licht, CFO at Burford Capital]

John will help me. And then I'll hit Asset Management and walk through our expenses as well as our capital and liquidity. So let's move to the Principal Finance segment. I'm skipping forward to Page 12. Start off in the top left, just the sheer size of the portfolio.

[Jordan Licht, CFO at Burford Capital]

When you look at fair value of $3,800,000,000 unfunded undrawn commitments of another 1,700,000,000.0 1,800,000,000.0 You can see how much that has grown since 2020. Let's take that $3,800,000,000 the fair value and break it down into a couple of components, which you see down below. YPF makes up approximately 43% of the assets. You then have the remainder of the rest of the portfolio, dollars 1,600,000,000.0 of deployed cost and another 33%, dollars $550,000,000, that's 33% of deployed cost that represents a fair value markup of the asset. Now when you look at that 33%, you can compare that to our historical ROIC.

[Jordan Licht, CFO at Burford Capital]

And there is a large amount of revenue if we were to hit that historical ROIC that has yet to come into the book. But let's flip over to the right hand side and look at the pie charts. If you look at the pie charts on the right, you see our exposure by geography. We're not just a U. S.-based company.

[Jordan Licht, CFO at Burford Capital]

Our clients are global. Our cases are global. You have 51% in North America, that's predominantly The U. S. But then you have another 25% ish, 26% in EMEA, another 20% that's a truly global portfolio.

[Jordan Licht, CFO at Burford Capital]

And our assets are quite diverse. I look at the pie chart down below and I see 20% pizza slices, 21% where you truly have a mixed portfolio, 20% antitrust, 20% intellectual property, 18% arbitration. And that truly shows the diversity of our team, of our footprint and of our asset types. I move forward to Page 13 to talk about how the asset moved forward over or the asset the portfolio moved forward over the period. Overall, if you look at our capital provision income, you see total realized and unrealized gains on par with last year. Total capital provision income, of course, is much larger, $246,000,000 versus $140,000,000 year to date and a good mix between both YPF and the rest of the portfolio. When I look at the two bottom charts, they both say the same thing. Left hand side is the second quarter. Right hand side is the year to date bridge.

[Jordan Licht, CFO at Burford Capital]

I'll focus on the left hand side and just walk through these items. The asset grew, of course, by our deployments. This is the cash going out the door. You see a passage of time, which is the next green bar. That's the duration impact as our assets move closer towards ultimate conclusion.

[Jordan Licht, CFO at Burford Capital]

And you can see when you compare the left to the right, dollars 61,000,000 on the left, 120,000,000, which makes sense given one quarter versus two quarters. Discount rates were favorable this period. And since our assets are in a net present value, when interest rates come down, the asset goes up in value. Interest rates the discount rate that we use to discount our assets was approximately 20 basis points in this quarter and also around 20 basis points in the first quarter. And so you see the $25,000,000 there of improvement.

[Jordan Licht, CFO at Burford Capital]

And then you have the impact of milestones and the other inputs. These are model inputs as well as the objective milestones that we see as our cases progress. And of course, realizations. And realizations should be negative. That's when the asset completes and turns itself into cash.

[Jordan Licht, CFO at Burford Capital]

And so you can see the progression of 3,600,000,000.0 to $3,800,000,000 But let's talk a little bit more about how that asset continues to grow by moving to Page 14. And it grows at first by us putting out new definitive commitments. A definitive commitment is one in which we've underwritten the case. And Chris alluded to how the second quarter was a great quarter with respect to the amount of business that we put on. If you just look at year to date 2025 versus 2024, you can see the huge growth, $518,000,000 compared to the $300,000,000 in the same period last year.

[Jordan Licht, CFO at Burford Capital]

And you can see the second quarter, $361,000,000 is our largest quarter compared to the last nine. When you look at those new definitive commitments, then say, look down at the chart, the pie chart on the bottom left, and you see that we now have over $1,000,000,000 of new definitive commitment. We talked to you at Investor Day about growing the portfolio. And that growth in the portfolio is around deployed cost and these cases that we've underwritten. And just looking at the new definitive commitments, that's grown from under $800,000,000 at the end of the year to the $1,650,000,000 it is now.

[Jordan Licht, CFO at Burford Capital]

As you recall, though, these commitments are not revolvers. The clients need to do the work in order to get invoiced in order for us to put the money out. And so you'll see that move episodically through each period. Overall, our deployments were in line with what they were last year. I turn to 15 to talk about our realizations.

[Jordan Licht, CFO at Burford Capital]

Overall realizations were ahead of pace of last year at $225,000,000 versus $219,000,000 You then look at the ROICs on the bottom, and you see that year to date, we're at 37%. And I think it's important to remind people of what we discussed in the first quarter. Our assets aren't homogeneous. Some are longer in duration, some are shorter, and they have different risk bands, which we depicted on the slide earlier. We had an asset in the first quarter that was originated in 2024 that concluded early in 2025.

[Jordan Licht, CFO at Burford Capital]

And when you saw that, you see a low ROIC, which makes sense when an asset has a short duration. But the IRR at 40% was quite healthy and above our average. And so naturally, you would expect to see the year to date 2025 ROIC be slightly lower than our historical. But that's not the only asset that concluded. It's important to note that in addition to that, we've had six additional assets generate 10,000,000 or more in year to date 2025.

[Jordan Licht, CFO at Burford Capital]

And with that, I'd like to turn it over to John to speak a little bit more about the portfolio.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

Thanks, Jordan, and thanks to you all for joining. As Jordan said, we have different ways that cases resolve and generate cash for us. And if you turn to Slide 16, you see that not just in a particular quarter, but over our lifetime. And we have now had realizations exceeding $3,500,000,000 over our lifetime. And you see, it's not that complicated a business, right?

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

I mean there may be variation, as Jordan said, with shorter term, lower risk, high dollar things that produce quick settlements and great IRRs, but lower ROICs. And then you have some things that go all the way to trial through appeals, and you can earn large multiples. And we see that breakdown on Slide 16. Of that EUR 3,500,000,000.0, roughly EUR 2,500,000,000.0 is coming from settlements. 78% of our deployments result in settlement And about just under €1,000,000,000 has come from adjudication wins, which comes from just 15% of our deployments but earning much higher returns.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

In contrast, our adjudication losses are only 7% of deployment. Like when you think about this slide, it really shows you why Chris and Jordan are able to say we had a good quarter, and we're able to say that again and again. I'm focused less on any particular quarter and more on how the business performs over the long haul. But to generate the 83% return on invested capital, 26% IRR with a weighted average life of two point six years, like how do we do that? Well, the asset class lends itself to that because there's two ways that things resolve.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

They either settle or they go to trial. The second part of it is we're good at what we do. You can see that we pick cases that win more often than they lose much more often than they lose at trial and that defendants recognize our strong cases as you move along, and therefore, they come to the table and settle. So this slide, I think, is capturing in numbers the quality of our team and the attractiveness of the asset class. And if you turn to Slide 17, which I've spoken to before, it sort of hammers that home but in a dispersion of all of our investment outcomes representation.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

So what I mentioned before, our losses are fewer. They're also smaller. You look at the left side of the chart, the black bars. The wins are more plentiful, but you also see some of them are very large. Those red bars where we are earning greater than a 200% return on invested capital, that's a triple or better with most people's lingo.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

So the asymmetry of returns makes this a really attractive asset. And and the way our team does it, we're able to get the most out of it. I just I can't think of another place to to invest capital that produces these kinds of returns because of the nature of the asset class if you do it right. And if you turn to Slide 17, you see that representation. This time, it is over time by vintage.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

And what's interesting about this this table is, again, you see the same IRR and ROC IC in the upper right over the life, and you see that breakdown differently year to year. As Jordan said, there could be a year where you have a very large short duration matter that the money goes out and comes back in relatively quickly. We are in a very attractive IRR, but a lower ROIC and other matters go the distance, take longer and can produce truly outsized returns. Over time and across the portfolio, these are where the numbers come down. And we're very happy to have that diversity.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

And Jordan mentioned, we have diversity across geography, subject matter, counterparty, you name it. A lot of the diversity is in terms of risk and duration and size as well, and we're very happy to have that. It makes for a robust portfolio that has performed very well over time and that is poised to continue to deliver. So one thing that's interesting about this is not just comparing the red bars to the black and gray. That's the first.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

When you look at this, you say, how much do you put out? How much do you get back? Those red bars are quite attractive. And you see, not surprisingly, the older vintages, the red is gonna be higher relative to black and gray because more things have had time to work their way through the system and resolve. Whereas for the more recent vintages, things haven't resolved yet, so the red isn't isn't gonna be as high.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

And so over time, we see the red bars go up. But I also don't want you to to think the black and gray are stagnant. I mean, Jordan mentioned before when we talked about how good this past quarter was as a matter of definitive commitments. We made commitments at the beginning, but it takes time for the lawyers working on the case to incur costs and to bill hours, and the money then goes from being a definitive commitment to an actual deployment. So the black and gray go up in the more recent vintages as well over time, and then the red will follow.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

And, you know, it's it's just, as I say, it's not that complicated. I guess it's it's complicated to underwrite any piece of litigation. But when you have a book like this with a team like we do, it just continues to perform, and I'm very pleased. So with that, I will turn it back over. Thanks so much.

[Jordan Licht, CFO at Burford Capital]

Thanks, John. I'll quickly switch over to the Asset Management segment. On Page 22, you can see some of the highlights depicted in pictures. The Asset Management income year to date of $21,000,000 compares favorably to where we were at the same point last year. And in the first quarter, I'll remind folks again that we recognized for the first time proceeds from the advantage fund.

[Jordan Licht, CFO at Burford Capital]

This is obviously a good first step in seeing that fund and its performance and value to us. Overall, you look at the size of the asset management portfolio, it's around $2,000,000,000 You have $1,000,000,000 in the partnership with the sovereign wealth fund and then slightly under $1,000,000,000 with respect to our other private funds. You then look at our overall cash and our liquidity. I'm on page 24. And you sit here and say we've got $440,000,000 of cash at the end of the quarter.

[Jordan Licht, CFO at Burford Capital]

That number obviously doesn't include the recent debt issuance that Chris just mentioned. But it was overall, absent that, still a very strong period with respect to cash year to date. If you look at the bottom right hand side, you can see that we've got $3.00 $6,000,000 of cash receipts year to date, which compares very favorably to the year to date of $245,000,000 same point last year. Overall, we also still have $118,000,000 of receivables on the balance sheet as of the end of the quarter. You look at our expenses on Page 25.

[Jordan Licht, CFO at Burford Capital]

And as Chris had mentioned, the quarter and year to date increases in expenses are predominantly attributable to variable noncash drivers in the comp and benefit line. And I'll spend a little bit of time walking through that. First and foremost, I've talked about this before, movements in the share price impact the share based and deferred compensation line. When our employees elected to defer their compensation and select Burford stock, that liability moves with the share price. And we hedge that.

[Jordan Licht, CFO at Burford Capital]

Unfortunately, it doesn't come through the income statement, but we buy those shares in the market to offset that. The other piece that you'll see is long term incentive comp is up. But of course, it's up. It should be. That is directly tied to our revenue as it represents our carry program.

[Jordan Licht, CFO at Burford Capital]

And we had a lot more revenue in this year to date period versus the same time last year. And then finally, you can see our G and A line that has come down to around $7,600,000 and that's right in line with the same quarter last year as well as the average throughout all of 2024. I'll finish up with our capital. Chris talked about the success of the issuance around the 2030s, and you can see that we've pro form a ed the end of the quarter numbers on this page. First off, 123,000,000 will be going out the door next week to pay off the $2,025,000,000 But more importantly, you can see that we've extended the maturity schedule.

[Jordan Licht, CFO at Burford Capital]

We enjoy the latter debt maturity schedule. It compares very favorably to the way in which our assets perform. That's been pushed out to five point two years. The weighted average cost of debt has only moved around 10 basis points. We're at 7.4 in terms of our weighted average.

[Jordan Licht, CFO at Burford Capital]

And overall, our metrics with respect to our covenants are well within covenant levels at 0.9 times, which puts us in a great place to continue to maintain the balance sheet, to continue to invest in new assets, and we have plenty of capital to do that as we look to continue to grow. And so with that, I'd like to turn it over to Chris for some closing remarks and then Q and A.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Thanks very much, Jordan, and I'm on Slide 27. Just I'll leave you with a couple of thoughts that we've already hit during the course of the presentation. The first is around new business. We wrote a lot of new business. We're happy with what's happening there. As we said during, the last call that we had with you, one of the factors affecting new business is the extent to which we have, you know, big cases, which are usually multi party multi party cases.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And sometimes we do and sometimes we don't in a period. This period and the period before, we do. And so that's a that's a good thing. It's not predictable. It's episodic.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

But when it happens, it just adds, as John was describing, to the overall value of the going forward portfolio because those are cash flows. Those cases do often settle, and those are cash flows that that will come back to us during the course of future years. So we're we're thrilled with the new business that we've written. We're thrilled with the overall growth in the portfolio base. Again, as I said before, exceeding the level, that we would need to be able to meet the longer term commitments that we outlined for you before at Investor Day.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

We're delighted as well that things are happening in the YPF case. You know, nobody ever nobody ever says litigation goes faster than you want it to, and the YPF case is an example of things that have not gone as quickly as we would have liked. But once you have forward momentum, that's a good thing. And you've seen, obviously, a whole lot of press coverage and media reaction to those developments. And Jordan just talked about our ability to access the markets.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

That's a really significant competitive moat for us. You don't see anybody else doing this. We remain the only litigation finance firm in the world, that is either publicly listed in the in the New York Stock Exchange or accessing the The US debt markets, US public debt markets. So with that, we're we're pleased with where we stand, and we'd be delighted to take your questions.

[Operator]

Your first question comes from Mark DeVries with Deutsche Bank.

[Mark Devries, Director at Deutsche Bank]

Thanks. Appreciate the incremental comments on YPF. Have a few follow ups that I think you can respond to without providing more fodder for Argentina's efforts to kind of distract the courts. More on timing, any sense for what the timing is for the Second Circuit to hear the appeal for Argentina to you know, on the order to turn over the the YPF shares?

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

So there's sort of a two part two part procedure going on there. So Argentine so what happened is judge Preska, on June 30, issued her order requiring the turnover of the shares. And then Argentina went back to her and asked her to stay that order pending appeal, and she declined to do so. She issued a written order saying, basically, that Argentina had been had been dragging their feet. So Argentina then went to the second circuit court of appeals and again did two things.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

One is they appealed the underlying turnover order, and the second is they asked the second circuit for a stay of the order. And so the second circuit, first of all, is going to decide whether to stay the order, and that's something that one would imagine they would decide fairly quickly. The matter is calendared next week, before a motions panel, but who knows when that motions panel, especially since we're in August, will issue a decision. So that's the stay portion of it. And the the decision on the stay probably has an impact on the speed of the the appeal itself of the turnover order being heard.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

So there's not a briefing schedule in place yet for the appeal of the turnover.

[Mark Devries, Director at Deutsche Bank]

Okay. That's helpful. And then, on the broader appeal of the case of the second circuit, can you just give a sense for how long it might take the second circuit to, to to give its judgment once it's it's heard the case or the appeal?

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Yeah. Unfortunately, there's really no answer to that. It it depends very much on the workload of the individual members of the panel that hear the case. Just just to back up from that, the second circuit is composed of 20 odd judges, but only three of them, hear individual cases. So you'll get a panel of three judges, and the the timing of a of a decision will depend on the the workload and speed of the member of the court who ultimately is assigned to write the decision.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

You know, you would hope that this would be measured in, you know, months, but, but it's very difficult beyond that to predict anything.

[Mark Devries, Director at Deutsche Bank]

Okay. Got it. And then just one last one. On the YPF related unrealized gains in the quarter, was that mainly driven by the Southern District ruling that they had to hand over the shares? Or was it related to some of the other progress you mentioned, Chris, and other jurisdictions?

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Jordan, do you want to touch on that?

[Jordan Licht, CFO at Burford Capital]

Yeah. I appreciate it. There's a couple of components. Obviously, there's what you just mentioned as well as duration, given the fact that we move forward a quarter and some interest rate change. So Mark, that's not something that we're going to detail how every single component there works, but those are the factors that moved it.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Okay. Got it. Thank you.

[Operator]

Your next question comes from Julian Roberts with Jefferies.

[Julian Roberts, Senior Associate at Jefferies]

Hi, there. Thanks very much for taking my questions. I've got a couple. It looks like, obviously, the YPF fair value gain resulting from progress in the case wasn't the whole of the fair value gain in the quarter. Can you give us any sense of how many other cases contributed to the fair value gains because of progress on the individual matters and whether there was any one that contributed quite a lot?

[Julian Roberts, Senior Associate at Jefferies]

And then my second question, which really comes in two parts, relates to the schedule of new assets for the 2025. And I was going to say the Asian ones, I don't think you made any investments in Asia last year. Are those in any way linked to the litigation and contract cases there, which I see are both single? And then I was going to say the you've had success initial success, it appears, in two other cases. One is a global mixed IP single case, where you've $5,000,000 of realizations and there are still $24,000,000 worth of deployments outstanding.

[Julian Roberts, Senior Associate at Jefferies]

Is it fair to read some success into that it being a single case? And is to what extent can we be optimistic about the rest of that realizing in the not too distant future?

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

So Jordan, do you want to take the first half of that and John the second perhaps?

[Jordan Licht, CFO at Burford Capital]

Yes. So Julian, appreciate the fact that you studied the website table. The first piece in terms of individual cases moving in, and you know we don't speak a lot around any individual cases. But on page 13, we do break out YPF versus the rest of the portfolio. I wouldn't say that in particular is one case or not.

[Jordan Licht, CFO at Burford Capital]

As I mentioned also, when we look at the realizations, we did have six different realizations besides the one that I had mentioned in the first half of the year that were over $10,000,000 So I would say, broadly speaking, it's an array across the book.

[Julian Roberts, Senior Associate at Jefferies]

Great. Thank you.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

John, do you want me to touch on IP or do you want to do that?

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

I think you could feel free. I mean, I would guess I would just say that when I look both at the questions about where realizations or fair value gains are coming and at the question of deployment of capital, although it is true, there are certain core things we get particularly excited about that move the needle. Like, we've grown enough. The portfolio is big enough both in terms of what we're putting out and what's moving through the the pipeline and the underwriting process at any given time and even more so what's in the portfolio that it probably wouldn't make sense to focus too much on any one thing as a harbinger of how the book is going to perform over the next quarters. There's no doubt that when you have a partial realization from a matter with a lot of money still outstanding, that's a a good sign.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

But I don't think I'd say anything beyond that. Chris, I don't know if you have color on it.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Yeah. Well,

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Julian, thanks for the questions. We haven't actually talked all that much about the way intellectual property cases work. And so maybe it's worth just thirty seconds on on that point because like like lots of other kinds of litigation, they fall into different categories or different buckets. You know? So sometimes we are, for example, financing a university that has developed some innovative technology and believes that there is an infringement going on of that technology, and the university doesn't have a budget to go and pursue it.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And so we might have we might there have, you know, one patent against one potential manager. Mhmm. But the other thing that might be happening is that you might actually have a category wide dynamic. So, again, you know, early technology development that that, you know, patent that people have overlooked, and now the university or whoever the patent holder is is saying, well well, look. You know, the this this wonderful new technology that lots of people are using, all of their uses infringe my patent.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And so there, you might have litigation, you might have licensing, you might have a combination of the two. And those, you can often have sort of a a a campaign style approach in in this in a not dissimilar way that we have, you know, multi party campaigns in the core commercial business. And so seeing one realization, as John said, you know, suggests that somebody out there believes they're vulnerable and therefore has settled, but that might just be the beginning of of that campaign's potential over time.

[Julian Roberts, Senior Associate at Jefferies]

Got it. That's very clear. Thank you.

[Operator]

Thanks. Thanks. Next question

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

comes

[Operator]

from Randy Diner with B. Riley Securities.

[Randy Binner, Managing Director at B.Riley Securities]

I apologize if I missed this in the prepared run through the deck, but with just an asset management, the asset management income of $7,100,000 in the quarter, it just was kind of below our expectation in the model. And I just I didn't quite catch why that was lower than in kind of other recent quarters. Can we review that, please?

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Sure, Jordan. Do you want to take that?

[Jordan Licht, CFO at Burford Capital]

Sure. Well, overall, when you look at our asset management piece, you first, I think, have to look at some of our historical funds still need to hit hurdles for us to hit the European based for us to receive the income. And those are funds some of those funds are ones that we inherited as part of the asset management acquisition years ago. With respect to the funds that we originated, those assets tend to be commingled with the balance sheet, and they'll tend to move generally in tandem with our recent vintages. Randy, I apologize I can't speak directly to what you modeled.

[Jordan Licht, CFO at Burford Capital]

The funds in of itself are not obviously, we're not growing at the same pace as they have historically been. Our focus has been on continuing to build the balance sheet as we move forward.

[Randy Binner, Managing Director at B.Riley Securities]

Okay. That's helpful. Thank you. Yes, we'll just that's helpful for the model. Then I guess a higher level question, if I may.

[Randy Binner, Managing Director at B.Riley Securities]

There was a lot of there's a lot of back and forth around the tax and budget bill in Washington last month. And I think it's a great outcome for Perford, but there's some op eds that kind of continue to talk about litigation finance as it relates to kind of the insurance industry. And I'm just wondering if you can share kind of like what you think the next iteration of that debate is and if there's if there's like a way to maybe find common ground with the other side there. Just be curious kind of your review of of how July went and and how that that that debate may continue?

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Well, I think that there's nothing new here is the is the reality. Know, when you think about what litigation finance does, you know, it it fundamentally deprives, what are usually defendants, are usually repeat users of the justice system. It deprives them of some structural advantages that they used to enjoy. And John has written, you know, extensively on on this subject, and I know a number of you have read his academic work on it, which is really seminal to the the creation of the industry. And so it it's not surprising that people in that position are unhappy about the loss of that structural advantage and are unhappy about the leveling of the playing field that capital on both sides of cases creates.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And so we have we have had opposition to what we do since the very beginning of Burford's existence from, from, you know, sort of deep pocketed corporate repeat defendants and from the insurance industry. I don't think that that will ever change. We have been successful throughout our life in managing that opposition because at the end of the day, the argument that they need to make is a very unappealing argument. You know, it's it's basically an argument that says we want an unfair advantage, and we want to make it more difficult for people to have their disputes adjudicated fairly and promptly. And that's why, you know, if you go literally around the world and listen to what governments and courts say, they say that the presence of litigation finance is a critically important element to the operation of their justice systems.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Now if you go and and read, for example, the review of litigation finance done fairly recently by the English government, they say exactly that. They basically say without the presence of litigation finance capital, they wouldn't be able to operate a fair and equitable justice system for all comers. And so I don't I think you'll always have the noise in the system. And I think we have shown that we're pretty effective at dealing with that continued noise because at the end of the day, people who do make decisions about this stuff realize the importance of of having this kind of quality of arms for justice systems that are important to the rule of law.

[Randy Binner, Managing Director at B.Riley Securities]

Alright. Great. Appreciate that. Thank you. Sure. Sure.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Go ahead.

[Operator]

Your next question comes from Alexander Bowers with Berenberg.

[Alexander Bowers, Associate Director, Equity Research Analyst at Berenberg]

Good afternoon, everyone. I just had two questions, if I may. The first was just on the pipeline. Are there any particular industries or geographies, particularly outside The U. S, where you see big growth opportunities at the moment to match new cases?

[Alexander Bowers, Associate Director, Equity Research Analyst at Berenberg]

That's my first question. Second question, just on something you raised at the Investor Day, which was an opportunities, broad opportunities in the ecosystem of law. So things like law firm equity stakes, legal tech, alternative delivery of legal services, etcetera. Can you give us any update in terms of things you're looking to pursue in that area? Thank you.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Sure. So in terms of the pipeline, the answer continues to be that we have, you know, a broad and well diversified pipeline. And the reason fundamentally for that is that we work so actively with so many of the world's large global law firms, and their businesses themselves are widely diversified. So when you go to, you know, pick pick your favorite big law firm, you go to that law firm, It's not like that law firm specializes in, let's say, energy or, you know, hotels. They do it all.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

They they represent every industry. And so as a result, the flow of business that we get in is industry wide as well. Now, obviously, there are there are industries that are more engaged in litigation than others. You know, I said hotels a minute ago. We don't do a lot of hotel litigation because, you know, hotels don't suit a lot of people.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

So there's certainly more litigation in the technology industry than there is in the hotel industry, just as one as one random example. But that but that's not a complete answer because you do certainly have industries that have one off kinds of litigation. Who would have thought that the, you know, that The US protein producers industry was, as the the US government found, engaged in rampant price fixing? And so you wouldn't normally say, oh, well, food, that's gonna be a big litigation area, but it just so happens that because of that conduct, there is meaningful litigation going on in in that industry today. In terms of geographies, the you know, we are continuing to expand what we do and where we do it.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

We've we've been a global business, and Jordan point pointed the the pie charts out to you before. We've been a global business for years, and we happily look at things all over the world. But in some cases, we have been doing that without boots on the ground. And what we're doing over time is continuing to expand the places where we have boots on the ground. You know, for example, just in the last just in the last few months, we have added people on the ground both in Korea and in Spain.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

We've done business in both of those markets for years, but having somebody physically present means, in our view, that we're likely to continue to expand the the amount of business that we do in in markets like that. And then in terms of the the sort of the non core stuff, law firm, equity, legal tech, and so on, yes, we are actively engaged in in a a regular review of potential opportunities there, and we we certainly, expect to continue to make progress there. We've deployed small amounts of capital already, in opportunities in those sectors, and we expect that to continue and grow over time. Thanks, Alex. And now we've got a webcast question from Trevor Griffiths, who says, Page 16 of the presentation shows radically better economics on adjudication results for only a six month increase in average life.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Why are your clients prepared to give up such attractive economics for such a brief acceleration in timing of outcome? John, did you want to comment on that?

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

Sure. Sure. I'm happy to. So for people's reference, you can see that adjudication wins has an average life of two point nine years versus settlements two point four years, and I think that's what Trevor's referring to. It's a good question.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

The big difference between that $1,000,000,000 that we've gotten in adjudication gains with close to 250% ROIC versus the $2,500,000,000 we've gotten from settlements with very attractive but lower IRRs and ROIC is risk as much as duration. If a case settles on the eve of trial and we do not take the risk, that binary risk of losing the suit, it makes sense, a, that the settlement is going to be lower than the trial outcome if you win, right? You're taking a discount in exchange not just for the accelerated payment, but also elimination of risk. And also, b, that sometimes our terms will be structured to take less proportionally than if we if it goes to trial. If the plaintiff chooses to go to trial and risk our capital on the outcome, there's going to be additional risk premiums sometimes charged for that decision to go to trial, whereas if they settle and eliminate the binary risk for us, then it may be cheaper for them.

[Jonathan Molot, Co-Founder & Chief Investment Officer at Burford Capital]

So there's a discount that the plaintiff is accepting from the defendant, but then there could be a further difference in the charge for our capital depending whether we take trial risk. But it's a good question.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

Yeah. Thanks, Trevor, for that. Another webcast question from Fraser Lang. With the rise of AI and utilization of personal and corporate data, how is Burford placed to evaluate and finance these types of cases? Well, I think the answer is really, the same way that we're placed to do anything that is touching new and and evolving activity.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

We have a a strong base of doing technology related litigation. We've we've done that forever and ever. You know, that certainly helped by the fact that that some number of us have come from technology you know, firms with technology backgrounds. As many of you know, I ran a technology media venture capital firm before starting Burford. And so these are certainly things that we pursue and are interested in.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

You know, just like everything that we do, though, you know, our focus is on large, complex, generally commercial style litigation, and not so much on on sort of individual individual use cases. So, you know, if if you have the misfortune of of having some sort of individual data breach, we're not likely to be involved in those kinds of cases. But, you know, in terms of the overall area, there's no question that AI presents a number of interesting legal issues. And those legal issues are some of them are already being chewed on by the courts. So the most interesting one right now is probably the the, you know, the copyright issues around the use of copyrighted material in training of large language models.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And I I think that as with most technological innovations, AI will will be not only, you know, life changing for businesses and for for all of us, but also give rise to some amount of dispute and and litigation, and we're happy to be, you know, active participants in that. And I'm just waiting to see if we have anything else, and I think we might have exhausted people in this August, in this August period. So thank you all very much for joining us. We appreciate it very much. We appreciate your support and interest in the business.

[Christopher Bogart, Co-Founder, CEO & Director at Burford Capital]

And as usual, we're always happy to talk to you individually questions that you may have about performance. And we'll look forward to talking to you again in a few months.

[Operator]

This concludes today's conference call. You may now disconnect.

Participants

Executives

• Josh Wood, Head - IR
• Christopher Bogart, Co-Founder, CEO & Director
• Jordan Licht, CFO
• Jonathan Molot, Co-Founder & Chief Investment Officer

Analysts

• Mark Devries, Director at Deutsche Bank
• Julian Roberts, Senior Associate at Jefferies
• Randy Binner, Managing Director at B.Riley Securities
• Alexander Bowers, Associate Director, Equity Research Analyst at Berenberg