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BURFORD CAPITAL PROVIDES 2020 BUSINESS UPDATE AND REINSTATES FULL DIVIDEND

Burford Capital Limited, the leading global finance and asset management firm focused on law, today released a business update on its 2020 activities. All figures in this disclosure are unaudited. Certain definitions are provided below; additional definitions, reconciliations and information are set out in Burford’s 2020 Interim Report, which is available on our website at the following address: www.burfordcapital.com/shareholders. As previously disclosed, Burford will announce full preliminary results for the year ended December 31, 2020 on March 24, 2021 at 08.00am EDT / 12.00pm GMT / 1.00pm CET.

Introduction1

Burford had the best year in its history for portfolio performance, generating record levels of realized gain and more cash from successes than ever before. Burford ended the year with its highest-ever levels of cash liquidity, and its portfolio of ongoing matters is larger than it has ever been. Burford’s concluded case ROIC rose to its highest year-end level in our history. New business, which suffered from the effects of the pandemic in 1H 2020, snapped back in 2H 2020. Notably, Burford’s YPF-related assets (comprising the Petersen and Eton Park claims) did not contribute to earnings in 2020, for the first time in five years.

Burford’s Group-wide total income crossed the half-billion-dollar mark in 2020 for the first time in our history, driven by significant asset realizations during the year. As our managed funds participated in a sizeable share of these realizations (which should generate performance fees for Burford in future years), Burford’s consolidated and balance sheet-only total income was largely flat in 2020 compared to 2019.  Profit after tax was down given modestly higher operating expenses and higher than normal book tax charges.

Burford suspended its dividend in early 2020 due to uncertainty around the pandemic, but given the year’s performance and Burford’s strong liquidity position, the Board will recommend that shareholders approve at the Annual General Meeting a full resumption of the dividend at its previous annual level of 12.5 US cents per share, with a record date in June 2021. Although Burford did not pay an interim dividend in December 2020, we will nonetheless recommend payment of the entire full year dividend of 12.5 US cents per share in June 2021.

Christopher Bogart, CEO, Burford Capital, commented:

“2020 was another year of strong performance for Burford. We achieved record amounts of asset realizations from core litigation finance, which generated more realized gains and cash proceeds from case successes than ever before, driving our cumulative concluded case ROIC to an all-time year-end high of 92%. With cash on Burford’s balance sheet of $336 million at the end of 2020, we are in a strong position to fund the additional future growth we anticipate. We look to the remainder of 2021 with excitement.”

Portfolio activity and returns

Burford saw strong performance in its capital provision-direct business – its traditional, core legal finance business:

  • Group-wide realizations of $608 million, up 72% (2019: $354 million)
  • Balance sheet realizations of $336 million, up 47% (2019: $228 million)

Those realizations translated into record-breaking realized gains in the capital provision-direct business:

  • Group-wide realized gains of $361 million, up 103% (2019: $178 million)
  • Balance sheet realized gains of $179 million, up 48% (2019: $121 million)

Burford’s successes pushed its concluded case ROIC since inception to its highest-ever year-end level at 92% at December 31, 2020 (2019: 88%) on $1.6 billion of cumulative realizations.

Burford’s 2020 realizations were lumpy, consistent with past experience, with an active first half and a slow second half. Even without a global pandemic, such volatility is to be expected from individual litigation matters and thus our portfolio. It is, therefore, difficult to identify the impact of the pandemic on realizations during 2H 2020. It is also difficult to predict the timing and impact of the post-pandemic environment on realizations as delayed cases may resolve alongside undisrupted matters or may be pushed out broadly across our capital provision assets. As the financing we provide often compensates Burford for the extension of a case’s duration, delay can give rise to increased income in successful recoveries where a time-based return component exists.

Burford also generated $223 million in Group-wide realizations in 2020 from its capital provision-indirect portfolio, of which $173 million were for the balance sheet.

Burford closed the year with the largest Group-wide portfolio in its history: $4.6 billion, up 8% (2019: $4.2 billion), representing a 53% CAGR over the last five years.

Cash generation and liquidity (Burford balance sheet only)

Almost all of our realizations turned into cash during 2020: the capital provision-direct business generated $325 million of cash proceeds, up 55% (2019: $210 million). The capital provision-indirect portfolio also produced $173 million in cash proceeds as Burford focused on accelerating resolutions in that portfolio in light of the pandemic, contributing to total cash receipts of $519 million. A substantial portion of the $281 million of due from settlement receivables at June 30, 2020 paid in cash during 2H 2020, such that due from settlement receivables at December 31, 2020 were only $30 million.

Thus, Burford ended the year with a record-breaking level of liquidity: $336 million of cash and cash management assets, up 63% (2019: $206 million).

New business

We believe that new commitments were negatively affected by the pandemic in the first half of 2020. However, activity rebounded in the second half of 2020 to return to levels consistent with the second half of 2019, but not sufficiently to offset the slower first half.

  • Group-wide new capital provision-direct commitments were $570 million in 2020, down 40% (2019: $955 million)
    • 2H 2020: $454 million, down only 7% (2H 2019: $490 million)
  • Balance sheet new capital provision-direct commitments were $336 million in 2020, down 37% (2019: $530 million)
    • 2H 2020: $279 million, down only 2% (2H 2019: $285 million)

Burford did not make any new commitments to the capital provision-indirect portfolio in 2020, consistent with our previously disclosed approach.

New deployments fell sharply in the first half of 2020 as courts closed and litigation matters (and therefore spending on those matters) slowed. Activity resumed in 2H 2020 and thus we saw significantly higher deployment levels than in 1H 2020, although activity remained below historical levels (and below 2H 2019 when we experienced an unusually high level of initial deployments on new commitments).

  • Group-wide capital provision-direct deployments were $368 million in 2020, down 27% (2019:  $501 million)
    • 2H 2020: $247 million, up 104% from 1H 2020 ($121 million), though down 26% from 2H 2019 ($335 million)
  • Balance sheet capital provision-direct deployments were $225 million in 2020, down 16% (2019:  $269 million)
    • 2H 2020: $158 million, up 136% from 1H 2020 ($67 million), though down 16% from 2H 2019 ($188 million)

Income statement metrics

Burford is in the process of preparing its 2020 financial statements, which also are subject to audit; thus, the figures below are preliminary and subject to adjustment. As a reminder, Burford prepares its financial statements on a consolidated basis, which includes the results of certain funds and other entities we are required to consolidate. These consolidated results are different than both our Group-wide results (which include all of our non-consolidated funds as well) and Burford-only results, which exclude the consolidated funds.

Burford’s overall portfolio performance was very strong on a cash basis; indeed, Group-wide total income exceeded $500 million for the first time. However, the structure of some of our investment funds means that the Burford balance sheet does not receive or recognize performance fees related to the fund portion of those successes until some future date given the funds’ “European” performance fee structure.  Moreover, 2020 was the first year in five years where Burford’s total income did not include any unrealized gain from the YPF-related assets.

Thus, we expect to report the following results for 2020:

  • Total income: $345-355 million on a consolidated basis (2019: $366 million), $340-350 million Burford-only (2019: $357 million)
    • Excluding income from YPF-related assets, which accounted for over half of 2019’s total, 2020 total income rose by $170-$180 million, or by 95-101%, on a consolidated basis and by $175-$185 million, or by 104-109%, on a Burford-only basis.
  • Operating profit (consolidated and unadjusted Burford-only): $240-250 million (2019: $265 million)
    • Operating profit was affected by modestly higher general operating expenses consistent with Burford’s ongoing growth strategy, current expenses related to managing assets in funds where the related performance fees will occur in the future and expenses related to Burford’s New York Stock Exchange listing and other equity-related matters
  • Profit after tax (consolidated and unadjusted Burford-only): $160-170 million (2019: $212 million)
    • Profit after tax was impacted by a large book tax charge, as discussed in our interim report that does not reflect the much lower level of cash taxes actually paid

Covid-19 pandemic

Burford’s business has been disrupted considerably less by the pandemic than might have been feared a year ago. To be sure, we saw slowdowns in new business during the first half of 2020, but then a rebound during the second half of the year. Courts and arbitral tribunals have adjusted their processes, although jury trials remain largely suspended. Doubtless we will see some elongation of the lives of some matters, but we have not seen any matters discontinue nor have any parties become insolvent. Our team has adjusted to remote work without much effort. We will not be entirely back to normal until people can safely gather in groups indoors, but we have certainly weathered this terrible time much better than many – and the future likely includes an uptick in disputes and, therefore, financing opportunities for Burford.

Definitions and use of alternative performance measures

We report our financial results under International Financial Reporting Standards (“IFRS”). IFRS requires us to present financials that consolidate some of the limited partner interests in funds we manage as well as assets held by our balance sheet where we have a partner or minority investor. We therefore refer to various presentations of our financial results as:

    • Consolidated refers to assets, liabilities and activities that include those third-party interests, partially owned subsidiaries and special purpose vehicles that we are required to consolidate under IFRS accounting. This presentation conforms to the presentation of Burford on a consolidated basis in our financials. The major entities consolidated into Burford include the Strategic Value Fund, BOF-C (our arrangement with a Sovereign Wealth Fund) and several entities in which Burford holds investments where there is also a third-party partner in or owner of those entities. Note that in our financial statements, our consolidated presentation is referred to as Group.
    • Burford-only, Burford standalone, Burford balance sheet only, “balance sheet” or similar terms refers to assets, liabilities and activities that pertain only to Burford itself, excluding any third-party interests and the portions of jointly owned entities owned by others.
    • Group-wide refers to Burford and its managed funds taken together, including those portions of the funds owned by third parties and including funds that are not consolidated into Burford’s consolidated financials. In addition to the consolidated funds, Group-wide includes the Partners funds (our first three core litigation finance funds), Burford Opportunity Fund and Burford Alternative Income Fund and its predecessor.

We refer to our capital provision assets in two categories:

  • Direct, which includes all our legal finance assets (including those generated by asset recovery and legal risk management activities) that we have made directly (i.e., not through participation in a fund) from our balance sheet. We also include direct (not through a fund) complex strategies assets in this category.
  • Indirect, which includes our balance sheet’s participations in one of our funds. Currently, this category is comprised entirely of our position in the Burford Strategic Value Fund.

We also use certain Alternative Performance Measures (“APMs”), which are not presented in accordance with IFRS, to measure the performance of certain of our assets including:

  • Return on invested capital (ROIC) means the absolute amount of realizations from a concluded asset divided by the amount of expenditure incurred in funding that asset, expressed as a percentage figure. In this release, when we refer to our concluded case ROIC, we are referring to the ROIC on concluded and partially concluded capital provision direct assets on Burford’s balance sheet since the inception of the company until the current date.
  • Compound annual growth rate (CAGR) is the annual rate of return that would be required for a sum to grow from its beginning balance to its end balance, assuming reinvestment at the end of each year.

Our business activities include:

  • Legal finance, which includes our traditional core litigation finance activities in which we are providing clients with financing against the future value of legal claims. It also encompasses our asset recovery and legal risk management activities, which often are provided to the same clients.
  • Complex strategies encompasses our activities providing capital as a principal in legal-related assets, often securities, loans and other financial assets where a significant portion of the expected return arises from the outcome of legal or regulatory activity. Most of our complex strategies activities over the past several years have been conducted through our Strategic Value Fund.
  • Post-settlement finance includes our financing of legal-related assets in situations where litigation has been resolved, such as financing of settlements and law firm receivables.
  • Asset management includes our activities administering the funds we manage for third-party investors.

Other terms we use include:

  • Cash receipts provide a measure of the cash that Burford’s business generates during a given year. In particular, cash receipts represent the cash generated from operations, including cash proceeds from realized assets, before any deployments into funding existing or new assets. Cash receipts are calculated as the cash proceeds from our capital provision assets, including cash proceeds from related hedging assets, plus cash income from asset management fees, services and other income.
  • Commitment is the amount of financing we agree to provide for a legal finance asset. Commitments can be definitive (requiring us to provide funding on a schedule, or more often, when certain expenses are incurred) or discretionary (only requiring us to provide funding after reviewing and approving a future matter). Unless otherwise indicated, commitments include deployed cost and undrawn commitments.
  • Deployment refers to the funding provided for an asset, which adds to Burford’s invested cost in that asset. We use the term interchangeably with addition.
  • Deployed cost is the amount of funding we have provided for an asset as of the applicable point in time.
  • Liquidity refers to the amount of cash and cash management assets on our balance sheet.
  • Portfolio refers to the total amount of our capital provision and post-settlement assets, valued at deployed cost plus any fair value adjustments and any undrawn commitments.
  • Realization: A legal finance asset is realized when the asset is concluded (when litigation risk has been resolved). A realization will result in Burford receiving cash or, occasionally, some other asset or recognizing a due from settlement receivable, reflecting what Burford is owed on the asset. We use the term interchangeably with recovery.
  • Realized gain/loss refers to the total amount of gain or loss generated by a legal finance asset when it is realized, calculated simply as realized proceeds less deployed funds, without regard for any previously recognized fair value adjustment.
  • Unadjusted Burford-only refers to Burford-only income metrics without adjustment, as presented in prior years, to exclude the impact of intangible amortization and certain other expenses.
  • YPF-related assets refers to our Petersen and Eton Park legal finance assets, which are two claims relating to Argentina’s nationalization of YPF, the Argentine energy company.

About Burford Capital

Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk managementasset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with law firms and clients around the world from its principal offices in New York, London, Chicago, Washington, Singapore and Sydney.

For more information, please visit www.burfordcapital.com.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any ordinary shares or other securities of Burford.

This release does not constitute an offer of any Burford fund. Burford Capital Investment Management LLC (“BCIM”), which acts as the fund manager of all Burford funds, is registered as an investment adviser with the U.S. Securities and Exchange Commission. The information provided herein is for informational purposes only. Past performance is not indicative of future results. The information contained herein is not, and should not be construed as, an offer to sell or the solicitation of an offer to buy any securities (including, without limitation, interests or shares in the funds). Any such offer or solicitation may be made only by means of a final confidential Private Placement Memorandum and other offering documents.

Forward-looking statements

This announcement contains “forward-looking statements” within the meaning of Section 21E of the US Securities Exchange Act of 1934 regarding assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as “forward-looking statements”. In some cases, predictive, future-tense or forward-looking words such as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “forecast”, “guidance”, “intend”, “may”, “plan”, “potential”, “predict”, “projected”, “should” or “will” or the negative of such terms or other comparable terminology are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. In addition, we and our representatives may from time to time make other oral or written statements which are forward-looking statements, including in our periodic reports that we file with the US Securities and Exchange Commission, other information sent to our security holders, and other written materials. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and are based on  numerous assumptions and that our actual results of operations, including our financial condition and liquidity and the development of the industry in which we operate, may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this report. Significant factors that may cause actual results to differ from those we expect include those discussed in “Item 3, Key Information – D. Risk Factors” in our registration statement on Form 20-F filed with the US Securities and Exchange Commission on September 11, 2020. In addition, even if our results of operations, including our financial condition and liquidity and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods.

Except as required by law, we undertake no obligation to update or revise the forward-looking statements contained in this report, whether as a result of new information, future events, a change in our views or expectations or otherwise.


Announcements

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New Burford Capital Research Reveals Significant Opportunities for Businesses Through Patent Monetization

By Harry Moran |

Burford Capital, the leading global finance and asset management firm focused on law, today releases new research on patent monetization, a means for businesses with significant intellectual property to generate revenue from patent assets through licensing, direct enforcement and corporate divestitures. With high research and development costs, long development timelines and intense IP competition, CFOs and GCs are faced with the challenge of seeking greater value from their companies' patent portfolios without diverting capital from core business operations. Moreover, converting underutilized intellectual property into liquid assets enables companies to fuel ongoing innovation and drive future growth.

Despite substantial investments in securing and maintaining patents, many companies fall short in leveraging their intellectual property—resulting in missed financial opportunities and ongoing costs that could otherwise be offset through monetization. This research shows companies shifting to a more proactive stance toward patent monetization as they face mounting economic pressures, rising costs of maintaining large patent portfolios and headline-generating enforcements and divestitures by major brands that increase acceptance. Nearly 70% of in-house lawyers say their organizations are more likely to monetize patents today than a decade ago, and 73% report that patent monetization revenue has grown over the last 10 years.

"Patent monetization remains a significantly underutilized asset for many businesses," said Christopher Bogart, CEO of Burford Capital. "Companies frequently hold valuable patents that require substantial investment to enforce, incurring significant expense—risk we routinely finance for clients. In today's climate of intensifying global competition and rapidly evolving IP enforcement landscapes, legal finance empowers companies to strengthen their patent monetization strategies and take a more proactive, value-driven approach to IP management."

"Companies have a significant opportunity to unlock value from their intellectual property," said Katharine Wolanyk, Managing Director at Burford Capital and head of its intellectual property and patent litigation finance division. "In conversations with CFOs and general counsel across industries, we frequently hear that patent portfolios are viewed as cost centers rather than assets, and this research substantiates that assertion. Legal finance offers a powerful solution by transforming underutilized IP assets into a source of liquidity that can fuel business priorities and allow companies to continue the essential cycle of innovation."

Key findings from the study include:

  • Companies are missing revenue opportunities: Even as patent monetization is increasing, 79% of in-house lawyers say that more than a quarter of their patent portfolio is underutilized. The costs of maintaining patents without monetization include lost revenue, delayed market entry and reduced market share.
  • Revenue generated by patent monetization is growing: 73% of in-house lawyers report that revenue from patent monetization has increased over the last 10 years and 69% of in-house lawyers say their organizations have become more likely to monetize patents in the past decade.
  • Divestiture is a fast-growing monetization strategy: 71% of in-house lawyers have already divested patents or are actively exploring divestiture options.
  • Clients can de-risk direct enforcement with finance: 72% of law firm lawyers cite the high cost of litigation as a deterrent to clients pursuing meritorious patent claims.
  • Legal finance plays a growing role in patent monetization: 59% of law firm lawyers say clients use legal finance for patent monetization; 51% of in-house lawyers say they are actively planning or exploring the use of legal finance to support patent enforcement and monetization going forward.
  • Global patent monetization is active: The US remains the top market for patent monetization due to strong enforcement mechanisms. The Unified Patent Court (UPC) is driving change in Europe, with 74% of in-house lawyers expecting increased enforcement in the region.

This research, commissioned by Burford and conducted by GLG, captures insights from 300 in-house IP counsel and law firm partners involved in patent litigation in North America, Europe and Asia.

The research report can be downloaded on Burford's website.

About Burford Capital

Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery, and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and works with companies and law firms around the world from its global network of offices.

For more information, please visit www.burfordcapital.com.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy any ordinary shares or other securities of Burford.

Court House Capital Appoints New CEO as Michelle Silvers Moves into Chairman Role

By Harry Moran |

Court House Capital is pleased to announce the appointment of Matt Hourn as its new Chief Executive Officer, effective 14 April 2025. This strategic leadership transition marks an exciting new chapter for the company as Michelle Silvers, who has served as CEO since 2020, steps into the role of Chairman of the Board. 

Michelle Silvers has been instrumental in Court House Capital’s growth, innovation, and performance since its inception. Her move into the Chairman position reflects the company's ongoing commitment to visionary leadership and long-term success. 

"Leading Court House Capital has been an incredible journey, and I am proud of what we've built. I look forward to continuing to support the company's future in a strategic capacity as Chairman." Michelle Silvers, Chairman, Court House Capital 

Incoming CEO Matt Hourn brings over 25 years of experience in commercial litigation and is cofounder of Court House Capital. His strong commercial insight and legal expertise, leadership capabilities, and innovative vision make him well-suited to drive the next phase of growth. 

"I am honoured to step into the role of CEO and build on the strong foundation Michelle has established," Matt Hourn, Chief Executive Officer, Court House Capital. 

This transition underscores the firm’s commitment to continuity and strategic evolution, positioning Court House Capital for sustained success. 

ABOUT COURT HOUSE CAPITAL 

Court House Capital is a leading litigation funder focused on cases in Australia and New Zealand. Led by industry founders, with Australian based capital, the team is renowned for expertise, agility and collaboration. courthousecapital.com.au 

IQuote Limited Strengthens Senior Leadership Team with New Director Appointment

By Harry Moran |

Manchester-based litigation finance firm IQuote Limited has bolstered its senior leadership team with the appointment of a new Director of Campaigns, reinforcing its commitment to expansion and innovation in the sector.

Stepping into the role is Katie Doherty, an experienced litigation finance specialist with a track record of driving growth and operational success. 

She has held senior positions at various law firms prior and has worked alongside IQuote CEO Craig Cornick for over 15 years across multiple roles.

Katie said she was both delighted and grateful for the opportunity and expressed a keen desire to get started as soon as possible. 

“It’s an incredibly exciting time for IQuote as we continue expanding our legal tech partnerships and investing in new opportunities,” Katie said.  “This is a fast-moving industry, and I’m looking forward to leading campaigns that will drive the firm’s next stage of growth.

“I can’t wait to get stuck in. IQuote has evolved massively in respect of its business offerings, the firms we are investing in, and the different campaigns we are now exploring. You have to be constantly thinking on your feet; there’s never a dull moment.”

Originally aspiring to become a solicitor, Doherty began her career in legal administration before transitioning into finance and business strategy.  She first collaborated with Craig in 2010, playing a key role in business operations, asset management, and claims handling. 

Katie thanked her team at IQuote for all their help and support.

“They have all been fantastic, and I have so much admiration for Craig,” she said.

“For him nothing is impossible; if you say, ‘it can’t be done,’ he will immediately tell you that it can and how you can make it happen.”

Craig Cornick, CEO of IQuote Limited, said: “Katie has been instrumental in the success of multiple businesses I’ve led, and her ability to think strategically while keeping operations running smoothly is unmatched.

“She knows how to build and execute campaigns that deliver real results, and that’s exactly what we need as we continue to scale. Her expertise in litigation finance, combined with her hands-on leadership style, makes her a perfect fit for this role.

“She’s got an incredible work ethic also. From the very start, Katie has always been willing to roll up her sleeves and do whatever it takes to get the job done. 

“Whether it was managing complex operations or jumping in to solve unexpected challenges, she’s always been a problem-solver. That kind of determination is what sets her apart and why I’m confident she’ll drive real impact in this position.”