INVESTOR PRESENTATION 1 H 2 0 1 9 R E S U L T S 2 5 J U L Y 2 0 1 9 This presentation is for the use of Burford’s public shareholders and is not an offering of any Burford private fund.
Highlights Increase in income Income Cash Receipts Profit After Tax ($ in millions) ($ in millions) ($ in millions) $287 $225 $310 $299 $205 $166 $126 $176 $143 Increase in PAT $186 $76 $101 $104 $53 $184 $41 $24 Increase in total assets 1H15 1H16 1H17 1H18 1H19 1H19 1H15 1H16 1H17 1H18 1H19 1H19 1H19 1H15 1H16 1H17 1H18 1H19 Investment receivables paid in July Interim Dividend Total Assets Portfolio returns ROIC per share (¢) ($ in millions) 98% $1.2 billion $2,252 85% 4.17 in investment 76% 3.67 70% $1,642 recoveries 3.05 60% 2.67 IRR $1,196 2.33 ROIC 32% 31% 30% $757 28% 27% $541 IRR Interim dividend 1H15 1H16 1H17 1H18 1H19 1H19 1H15 1H16 1H17 1H18 1H19 1H19 2015 2016 2017 2018 1H19 1H19 Income, operating profit, profit before tax and profit after tax exclude the impact of amortisation of the intangible asset and third-party interests in consolidated entities. Please 2 refer throughout to definitions and qualifications contained in Burford’s 2019 Interim Report.
New investment commitments and deployments • Burford committed more capital than ever before in a half-year period: $751 million, a 36% increase (1H 2018: $553 million) • Core litigation finance commitments saw impressive growth: $381 million, a 47% increase (1H 2018: $259 million) Commitments include an innovative $130 million portfolio - New investment commitments Investment deployments ($ in millions) ($ in millions) $751 $448 $413 $112 $26 $553 $320 $492 $162 $276 $224 $213 $99 $262 $251 $363 $221 $340 $198 $183 $230 $200 $81 $43 1H15 1H16 1H17 1H18 1H19 1H15 1H16 1H17 1H18 1H19 Balance sheet Funds SWF Balance sheet Funds SWF 3
Burford’s evolution L E G A L R I S K M A N A G E M E N T C O R E L I T I G A T I O N F I N A N C E New 1H 2019 investment commitments 2% 7% • Burford Worldwide Insurance Limited • Financing to corporate clients and law created to provide global, large dollar firms against value of legal claims 15% adverse cost coverage 51% • Client has ultimate decision-making • Substantial reinsurance capacity authority in the litigation 25% Legacy ATE insurance business in run- Single case • • off • Portfolios Core Complex Post- Asset Legal risk litigation strategies settlement recovery management finance P O S T - S E T T L E M E N T C O M P L E X S T R A T E G I E S A S S E T R E C O V E R Y • Direct investment in an underlying asset • Monetisation of post-settlement and • Enforcement of judgments globally where the value to Burford is tied to the other legal receivables • Provide expert assistance to lawyers outcome of litigation or a regulatory • Investments made only through funds and clients around global asset process collection and enforcement 4 4
Burford invests broadly across the legal industry located around the world $2.8 billion current investment portfolio $1,612 ($ in millions) $128 $395 Balance sheet investments qualified in US, UK, Australia, Germany, Funds and other vehicle investments Switzerland, Hong Kong and Israel SWF investments $1,089 $466 $347 $164 $154 New York, London, Chicago, Washington, $134 $117 $95 $272 Singapore and Sydney $193 $134 $117 $84 Portfolio Single case Complex strategies Legal risk mgmt Asset recovery Post-settlement Note: Investments shown at cost without fair value adjustments but including undrawn commitments with a cumulative 250+ years of legal experience 5
Demand continues to increase • Surveyed more than 500 CFOs and senior finance professionals from the US, UK and Canada “How likely would you be to “Our company has chosen to forgo “Legal cost management is an urgent recommend litigation finance to your claims due to impact of associated issue for companies and requires company?” legal expense on the bottom line.” innovative solutions.” 0.6% 4.8% 10.4% 12.2% 61.2% 63.0% 18.1% 33.5% 71.5% 24.9% Very likely Somewhat likely Agree Neutral Disagree Agree Neutral Disagree Not very likely Not at all likely 95% are likely to recommend 73% of large corporates and 63% 86% of US corporates and 71% legal finance at their companies & of all respondents have chosen to of all respondents believe that 61% very likely forgo claims due to the impact of legal cost management is an legal expenses on their profits urgent issue Source: 2019 Managing Legal Risk Report — A Survey of CFOs and Finance Professionals 6
Innovation continues C O N T I N U E D D E V E L O P M E N T O F S E C O N D A R Y M A R K E T Burford sold a further 10% of its Petersen entitlement for $100 million implying a $1 billion valuation for Burford’s entire entitlement 11 investors participated in this secondary sale and more than 40 investors have participated in the market demonstrating broad interest - Burford retains 61.25% of its original entitlement while generating $236 million in proceeds on an initial investment of $18 million - I N N O V A T I V E N E W P O R T F O L I O Burford ’s largest new commitment in the first half was for a $130 million portfolio This new form of portfolio finance with a major global business is unlike anything seen in the market today - Took more than a year to structure – template for offering to other clients - E X P A N D I N G A S S E T R E C O V E R Y I N V E S T M E N T S Two innovative investments in the first half A major bank contracted us to provide asset recovery services across a significant portfolio of uncollected debt - Established a long-dated and exclusive relationship with a significant law firm in the asset recovery sector - 7
Investment commitments across the business Balance sheet Fund and other vehicle Sovereign wealth fund Total ($ in millions) commitments commitments commitments commitments Single case finance $40.4 11% $21.6 8% $18.6 17% $80.6 $33.2 10% $11.8 6% – – $45.0 Investments subject to binary legal risk, such as financing the costs of pursuing a single litigation claim Portfolio finance $132.4 36% $81.4 29% $86.9 77% $300.7 Investments with multiple paths to recovery where Burford’s returns come entirely from litigation $136.6 40% $76.9 36% – – $213.5 outcomes, such as financing a cross- collateralized pool of a client’s litigation claims Legal risk management $7.8 2% $4.7 2% $6.2 6% $18.7 Investments where Burford is providing some form of legal risk arrangement, such as providing an $19.0 6% $6.6 3% - - $25.6 indemnity for adverse costs Asset recovery $53.2 15% - - - - $53.2 $48.8 14% - - - - $48.8 Enforcement of legal judgments Complex strategies $128.9 36% $57.9 21% - - $186.8 Investments where there is an asset value supporting the litigation investment, usually where Burford is a $102.6 30% $67.3 32% - - $169.9 principal Post-settlement - - $110.9 40% - - $110.9 - - $49.9 23% - - $49.9 Investments were litigation risk has largely been removed through settlement or other resolution $362.7 100% $276.5 100% $111.7 100% $750.9 Total $340.2 100% $212.5 100% - - $552.7 $751 million Total new investment commitments Note: 1H 201 019 9 commit itment figu gures s ar are bold lded, 1H 2018 commitment figures are light gray 8 1H 2018 post-settlement figures have been recast from single case, portfolio finance and complex strategies. 1H 2018 complex strategies figure has been recast to include capital used to support hedging
Large and widely diversified balance sheet portfolio Balance sheet investment portfolio Balance sheet portfolio ($ in millions) 5% 8% $773 $2,404 17% $1,631 70% Recourse/ Current Undrawn Total investment Total Portfolio Single Complex Asset Complex investments commitments portfolio investment case strategies recovery strategies portfolio Note: Includes all segment investments including fair value Note: Includes all segment investments including fair value 9
Balance sheet: Concluded core litigation investments • $1.2 billion in recoveries from investments Portfolio returns Investment recoveries & weighted average duration of concluded portfolio made on Burford’s balance sheet ($ in millions) 98% 2.0 $1,500 • Recoveries generated profits of $573 million 1.8 1.7 1.6 85% 1.5 2.0 $1,300 Duration 76% $1,159 (years) 70% • Investment portfolio since inception has $1,027 1.0 $1,100 60% produced a 98% ROIC and 32% IRR ROIC $900 $760 0.0 $700 • Weighted average duration of the concluded 32% $522 -1.0 31% 30% 28% 27% $500 portfolio remains below 2 years $348 -2.0 IRR $300 -3.0 $100 2015 2016 2017 2018 1H19 1H19 1H19 2015 2016 2017 2018 1H19 -$100 -4.0 10
Balance sheet: Concluded core litigation investments 11
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