Burford Capital(US:BUR)2025-11-05 15:00Financial Data and Key Metrics Changes - Definitive commitments increased by over 50% year-to-date, with the overall portfolio up 15% year-to-date, translating to a 20% annualized growth rate [11] - Deployments rose by 61% in the third quarter compared to the previous year [12] - Internal rates of return (IRRs) remained steady at 26% on $3.6 billion of realizations, with loss rates stable [15] Business Line Data and Key Metrics Changes - Capital provision income revenue decreased year-to-date, primarily due to extensions in fair model durations [27] - The total fair value increased from $3.8 billion to $3.9 billion, driven by deployments and realizations [28] - Realizations for the year reached $310 million, with a focus on multi-period performance rather than quarterly fluctuations [33] Market Data and Key Metrics Changes - The company is experiencing a diversified portfolio across various geographies and case types, including arbitration, antitrust, contract cases, and patents [27] - The market reaction to the YPF case has been noted as an overreaction, with management remaining bullish on the case's potential outcomes [10][20] Company Strategy and Development Direction - The company aims to double its business by 2030, with ongoing organic and inorganic growth strategies [11][22] - Management is focused on maintaining a strong alignment of interests as large shareholders and committed executives [19] - The company is cautious about share buybacks, preferring to invest in business growth rather than diverting cash for stock repurchases [21][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's performance despite litigation delays and uncertainties [15][20] - The company anticipates continued momentum in realizations, with more trials and hearings scheduled compared to the previous year [46] - The impact of the U.S. government shutdown on litigation operations has been negligible [55] Other Important Information - The appointment of Bank of America as corporate broker signifies a step forward in market leadership [25] - The company maintains a strong cash position of $740 million, partly due to the recent issuance of $500 million notes [41] Q&A Session Summary Question: Timing of the appeal regarding YPF shares - The appeal is expected to be fully briefed by December, with no fixed argument date yet scheduled, likely extending into 2026 [44] Question: Trajectory of realizations in the coming years - There is a continuing velocity in the portfolio, with more scheduled events than the previous year, indicating elevated realizations as courts catch up [46][48] Question: Details on the change of expected timing for case durations - The impact of duration changes is estimated to be around $40 million-$50 million compared to the overall deployed cost fair value [50] Question: Thoughts on share buybacks and capital utilization - Management is focused on prudent management of the business, weighing the risks of leveraging against the unpredictability of cash flows from realizations [51][53] Question: Impact of the U.S. government shutdown - The shutdown has not affected the litigation portfolio, with courts continuing to operate normally [55] Question: Opportunities for growth through acquisitions - The competitive landscape is evolving, with potential opportunities for growth through acquisitions, though the outcome remains uncertain [57]