Leading the way, today and for the long-term

Annual report 2019

Leading the way, today and for the long-term

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Financial highlights

  • Large, diversified portfolio

    Total portfolio

    ($ in millions)

    chart chart
    • Burford balance sheet only
    • Funds including SWF
  • Continued rapid growth

    Annual commitments

    ($ in millions)

    chart chart
    • Burford balance sheet only
    • Funds including SWF
  • Strong cash generation

    Cash generated during 2019
    Burford balance sheet only

    ($ in millions)

    chart chart
    • Cash generated from operations
    • Operating expenses
    • Finance costs
    • Cash available from deployment
    • Total
    • Expenses
    • Net
  • Consistent returns

    Core litigation finance returns since inception
    Burford balance sheet only

    ($ in millions)

    chart chart
    • Core litigation finance recoveries
    • ROIC%
    • IRR%

At a glance

A specialty finance business focused on law

Burford is a multi-faceted financial services business focused on the legal industry

  • Clear market leader in legal finance
  • Strong position with significant moats
  • Diverse capital structure including innovative financings
  • Significant positive cash flow

Our unique advantages

1.

Significant
scale, capital
and resources

1.
  • Institutional quality business
  • Immediate access to substantial capital
2.

Strong relationships and brand

2.
  • Strong relationships with law firms and corporate clients
  • One-stop shopping approach provides added value for clients
  • Most recognisable player in the market
  • Enables us to scale existing strategies and launch new ones
3.

A large and diversified portfolio with lower risk

3.
  • Most diverse product offering in the market
  • New entrants will take many years to achieve comparable diversification-and operate at higher risk in the interim
4.

Large, experienced team

4.
  • Arguably the most experienced team in the industry
  • High-quality decision making and deep knowledge
  • Burford’s training and experience transfer is essential: Lawyers can’t do this out of the box
5.

Proprietary data and systems

5.
  • Unmatched dataset to enhance investment decisions
  • Bespoke risk assessment and modelling

Management statement

In 2019, the final year of its first decade, Burford made new commitments of more than $1.5 billion, a record, and deployed more than a billion dollars in capital. We have come a long way from the $11 million in commitments we made in 2009, our first year in business. That speaks to what we have accomplished: the transformation of the global legal industry as a user of capital, and the creation of a widespread understanding that legal claims and judgments are financeable assets.

We have done that by building an industry-leading team that lives up to the quality of the global brand we have developed. Sixty-three percent of lawyers name Burford first or solely in answer to the question, “What providers of litigation finance are you most familiar with?” No other firm even makes it to ten percent.

Sir Peter Middleton GCP

Sir Peter Middleton GCP

Chairman

Christopher Bogart

Christopher Bogart

Chief Executive Officer

Jonathan Molot

Jonathan Molot

Chief Investment Officer

An economic incentive to close the Gender Gap in law

An economic incentive to close the gender gap in law

In October 2018, Burford launched The Equity Project, a ground-breaking initiative to commit a $50 million capital pool for financing commercial litigation and arbitration led by women. The Equity Project seeks to address the significant and stubbornly persistent gender gap, which is particularly acute at the senior-most levels of the world’s largest law firms.

2019 Awards

  • Innovative Lawyers
  • GAR
  • New York

Our business model

How we deliver value

Commercial legal claims, defences, settlements, judgments, awards and fee receivables are financial assets. We help companies and law firms unlock the value of these financial assets by providing a range of financing and risk management solutions based on their expected future value. We fund these solutions by deploying capital from our own balance sheet and private investment funds that we manage.

Burford’s breadth of services gives us many ways to work with clients and generate revenue from our expertise in valuing and managing legal assets.

  • Core litigation finance

    Core litigation finance

    • Financing to corporate clients and law firms against value of legal assets either on a single case or a portfolio basis
    • Client retains ultimate decision-making authority in the litigation
  • Complex strategies

    Complex strategies

    • Investment in underlying asset where the value to Burford is tied to the outcome of litigation or regulatory process
  • Asset management

    Asset management

    • Managing private investment funds focused on legal finance assets
  • Asset recovery

    Asset recovery

    • Enforcement of judgments globally
    • Expert assistance to lawyers and clients on global asset collection and enforcement
  • Post-settlement

    Post-settlement

    • Monetisation of post-settlement and other legal receivables
    • Deployments made only through funds
  • Legal risk management

    Legal risk management

    • Global large dollar adverse cost insurance
  • Core litigation finance

    Core litigation finance

    • Financing to corporate clients and law firms against value of legal assets either on a single case or a portfolio basis
    • Client retains ultimate decision-making authority in the litigation
  • Complex strategies

    Complex strategies

    • Investment in underlying asset where the value to Burford is tied to the outcome of litigation or regulatory process
  • Asset management

    Asset management

    • Managing private investment funds focused on legal finance assets
  • Asset recovery

    Asset recovery

    • Enforcement of judgments globally
    • Expert assistance to lawyers and clients on global asset collection and enforcement
  • Post-settlement

    Post-settlement

    • Monetisation of post-settlement and other legal receivables
    • Deployments made only through funds
  • Legal risk management

    Legal risk management

    • Global large dollar adverse cost insurance

We operate multiple sources of capital, as this better serves clients while giving us a competitive advantage and the optionality to sustain our high growth.

Total portfolio

Total portfolio
  • Balance sheet 65%
  • Strategic Capital 6%
  • Private Funds 29%
$4.2bn in our Group-wide portfolio
$4.2bn in our Group-wide portfolio

Balance sheet

$2.3bn total assets, including
  • $1.8bn capital provision portfolio
  • $0.2b cash

Strategic capital

$1bn pooled SWF arrangement
  • $667m from sovereign wealth fund
  • $333m from balance sheet

Funded by

  • $1.5b shareholders’ equity
  • $0.7b debt

Profit split

  • 60% to the balance sheet
  • 40% to the sovereign wealth fund

Private funds

$2.9bn assets under management, including funds currently being invested:
  • $500m Strategic Value Fund
  • $300m Burford Opportunity Fund
  • $300m Burford Alternative Income Fund

Balance sheet

$2.3bn total assets, including
  • $1.8bn capital provision portfolio
  • $0.2b cash

Strategic capital

$1bn pooled SWF arrangement
  • $667m from sovereign wealth fund
  • $333m from balance sheet

Funded by

  • $1.5b shareholders’ equity
  • $0.7b debt

Profit split

  • 60% to the balance sheet
  • 40% to the sovereign wealth fund

Private funds

$2.9bn assets under management, including funds currently being invested:
  • $500m Strategic Value Fund
  • $300m Burford Opportunity Fund
  • $300m Burford Alternative Income Fund

We use organically generated capital from fees and asset realisations as well as external finance to fund profitable balance sheet growth.

 

Balance sheet realisations from concluded portfolio since inception*

  • $1.3b
    Total recoveries
  • $0.6b
    Cash profits from recoveries
  • $0.7b
    Deployed capital returned from recoveries
Core litigation finance
  • 93%
    ROIC
  • 31%
    IRR
Capital provision-direct*
  • 88%
    ROIC
  • 31%
    IRR
Group-wide cash receipts
  • $1b
    2019
Balance sheet cash receipts
  • $0.5b
    2019
  • $2.1b
    since inception

ROIC: Return on invested capital
IRR: Internal rate of return

* Capital provision-direct portfolio which includes core litigation finance, asset recovery and non-fund complex strategies assets.

We are strongly aligned behind the shared objective of creating value for all our stakeholders worldwide.

  • Shareholders

    Shareholders

    We aim to deliver superior risk-adjusted returns uncorrelated to the market or economy, creating the conditions for attractive total shareholder returns. Since inception in 2009 our total shareholder return is 743%.

  • Companies

    Companies

    Our solutions allow businesses to attribute financial value to claims, increase working capital and raise capital efficiency.

  • Law firms

    Law firms

    93 AmLaw 100 and 89 of the 100 largest global law firms, along with numerous respected litigation boutiques, have sought our capital and services to meet the growing and complex needs of their clients and facilitate growth for their firms.

  • Fund investors

    Fund investors

    We are the stewards of billions of dollars of endowment, pension fund, and other investor capital, which we safeguard and work to enhance.

  • Bondholders

    Bondholders

    Through judicious oversight of our asset portfolio and parsimonious use of external finance, we manage our liquidity and capital prudently, supporting predictable returns for our note holders and optimal credit ratings.

  • Employees

    Employees

    We recruit diversely, encourage intellect and develop professionals who succeed.

  • Society

    Society

    Legal finance permits meritorious disputes to be resolved and monetised. Efficient resource attribution improves productivity, in turn increasing economic growth.

  • Shareholders

    Shareholders

    We aim to deliver superior risk-adjusted returns uncorrelated to the market or economy, creating the conditions for attractive total shareholder returns. Since inception in 2009 our total shareholder return is 743%.

  • Companies

    Companies

    Our solutions allow businesses to attribute financial value to claims, increase working capital and raise capital efficiency.

  • Law firms

    Law firms

    93 AmLaw 100 and 89 of the 100 largest global law firms, along with numerous respected litigation boutiques, have sought our capital and services to meet the growing and complex needs of their clients and facilitate growth for their firms.

  • Fund investors

    Fund investors

    We are the stewards of billions of dollars of endowment, pension fund, and other investor capital, which we safeguard and work to enhance.

  • Bondholders

    Bondholders

    Through judicious oversight of our asset portfolio and parsimonious use of external finance, we manage our liquidity and capital prudently, supporting predictable returns for our note holders and optimal credit ratings.

  • Employees

    Employees

    We recruit diversely, encourage intellect and develop professionals who succeed.

  • Society

    Society

    Legal finance permits meritorious disputes to be resolved and monetised. Efficient resource attribution improves productivity, in turn increasing economic growth.