Hello. And welcome to the Burford Capital Interim 2021 Results Call. On the line with me today is Christopher Bogart, Chief Executive Officer, Jonathan Molot, Chief Investment Officer and Ken Brause, Chief Financial Officer. I will now hand over to your host, Christopher Bogart, Chief Executive Officer. Chris, over to you.

Hello, everyone, and thank you for joining us for another Burford earnings presentation. We are delighted to have so many of you with us today on the phone or on our webcast or online. And as usual, I am joined by Jon Molot, Buford’s Chief Investment Officer and for the very first time, Ken Brause, our new Chief Financial Officer. We're looking forward to introducing all of you to Ken. The three of us as usual will walk through the slides that we've distributed and that are available on our website. At the end of our presentation, we'll open the floor to questions and look forward to having some further dialogue with you. We are excited about the results that we were able to post for the first half of 2021. Really three key messages came away from those results. The first is around new business growth. Not just commitments, but also a really strong record-breaking deployment position. Having us deploy capital is obviously critical to our future potential profits from that capital. And so, smashing our prior performance there, especially in an era where we had seen some prior COVID-related delays and was really, very, very rewarding and sets the business up well for the future. The portfolio itself was slower in terms of its turnover over this period, but we didn't come away with any bad news. Returns are up a little bit. Losses are down and we completed the Akhmedov matter, which over time has brought in $108 million to us. Pretty impressive returns, 233% return on invested capital, 71% IRR. And in addition to that, sort of underlining our ability to do large complex noisy matters like that and frankly the appropriateness of us doing them for all the reasons we said out in the past.…

Thank you, Chris. Thanks to everybody for joining. Speaking of court schedules, I would say that, Chris pointed out that sort of slowdowns we experienced in doing new deals and putting new money out during the COVID-related effects on the economy. That really feels like it's behind us. We've bounced back. When it comes to how our portfolio has performed, like what kind of realizations have we've seen, there, we still do see COVID-related delays. And if you look at Slide 7, I'll walk you through how we are doing in terms of realizations. On the one hand, there is good news that although our realizations are down from the first half of 2020, they are up from the second half of 2020 and to the extent that realizations haven't yet returned to earlier levels, it's not because anything bad has happened, it's not because we've lost cases. It’s just been because of delays. In fact, our realized loss rate decreased to 0.5% in the first half of 2021, down from the second half of 2020. But, close to half of our matters have been delayed by COVID. And we see the courts picking up. But there is no doubt that that slowed things down. Now those delays are just bad delays. There is not a single case in our portfolio that was discontinued because of COVID. All the money we put out the assets, we've got in our portfolio, the deals we've done, they are all there. And so, in fact, delay is not necessarily a bad thing for us because often our deals are negotiated with increasing returns that are a product at the time and therefore they can lead to greater profitability. So the fact that you can sort of see a graphically represented on the lower…

Well, thanks, Jon. And Chris, thank you for that nice introduction and glad to be here today. It's been just over four months since I joined Burford and pleased to be at my first results call. Since Chris has already addressed some of the key operating and financial results for the period, I thought I'd start by discussing our liquidity and funding and then follow that with some comments on a few components of our financials. And just for the record, unless I state otherwise, the figures I mention are going be on a Burford only basis. So turning to Slide 10, you can see here we ended the period in our strongest liquidity position ever. Our cash and cash management assets at the end of June was $430 million, a new high for us. And this strong level of liquidity reflects a robust $215 million in deployments in the first half, but knocks the $103 million we collected in July for the Akhmedov realization, which represented the majority of our due from settlement receivable at period end. The largest contributor to the increase in cash assets in the first half was our $400 million U.S. Bond issuance April that Chris mentioned, our first in the U.S. And as intended, we utilized the portion of the net proceeds of that offering to repurchase £24 million or US$33 million of our nearest bond maturity, which occurs in August of 2022. And I'll discuss the details of that tender in a few minutes. You’ll also notice on the graph that cash management assets constituted a much larger proportion of our total liquidity than in the past. These cash management assets consists predominantly of high quality and liquids fixed income assets and are managed by one of the top fixed income managers in…

Thanks, Ken. And on Slide 15, we've just got half-a-dozen key bullet points to really sum up the remarks that we just made. I am not going to dwell on them, so that we leave lots of time for question., but it's really back to what I said at the beginning, three fundamental points; number one, a terrific period for new business, both commitments and the deployments shattering our deployment record. Number two, a strong portfolio that has grown a little bit had a relatively quiet period for realizations, probably in part due to some COVID delays, but at the same time, saw the returns tick up a little bit with really low loss rates. And number three, a strong position overall liquidity, cash and the accounting noise that we discussed previously. So, we are pretty happy, especially in the middle of the ongoing global pandemic with where things stand. We are looking forward to getting back into real business development and origination to show you what we can do then. But for now, let's take any questions that you may have.

The first question comes from David Chiaverini from Wedbush Securities. David, please go ahead.

Hi. Thanks for taking the questions. The first one, I wanted to touch on, you mentioned about the record level of new business with commitments over $500 million. Can you talk about the pipeline for new deals on the go-forward basis?

Sure. Although we don't do a lot of forward-looking commentary in this business, because for a whole variety of reasons that we've laid in the past. But what I'd say, just as a general matter is, just sort of echo what Jon said before. We saw a sharp reduction in the pipeline and in new business, which was we believe entirely COVID-related in the first half of 2020. We saw resumption of activity, but not to historic levels in the second half of 2020. And then in the first half of 2021, we obviously saw a meaningfully greater ability to deploy capital. It's a little early probably to determine exactly how the Delta variant is going to impact the legal world and in turn how that's going to impact us. But we are certainly seeing opportunities to invest at this point of the cycle.

Great. Thanks for that. I appreciate how the business can be lumpy and volatile quarter-to-quarter or interim results stand through results period. Shifting to - you mentioned about how the delay in resolving some matters could be more profitable for Burford. I was curious what level of time value on average is built into the deal structures?

Jon, do you want to address that?

Sure. Thanks for the question. It really does vary by matter. We are always trying to be protective of ourselves of things - if things trigger a delay, but I think we've said historically that our returns usually consist of two elements. There is going to be a preferred return, which is going to be dependent upon how much money we've put out on what schedule and then there is going to be a percentage of the recovery, which is going to depend on how much rather than when. Although both of those elements can be toggled with time as such that you could say if a matter resolves early, we get this preferred return and this percentage of the net. If it could takes longer, which is often a question both of whether it takes longer and if we put out more money, then our preferred return goes up by half an x or an x and our percentage of the net goes up by 5% or 10%. So that if it goes the full distance and the full duration, we end up with our maximum returns. And I can't - I don't have the numbers handy. We haven't sort of broken down across our portfolio, how much of an effect time has on returns. I can just say as a general matter, it's a feature that is often incorporated into the terms of our deals.

Great. Thank you. And then, the last one for me, I saw a media report about how a law firm that's not a Burford client, but I had a question about it nonetheless that this law firm was pledging assets to multiple litigation finance firms without each of those firms knowing about it. So it was amounting to fraud. But I was curious is Burford taking any measures to mitigate any sort of risk that this issue could present whether it's creating escrow accounts or cash flows, just curious about any commentary there?

Sure. The case that you're talking about is a fairly well-known case for a variety of reasons. It's a California lawyer whose wife - sort of a very high profile California lawyer whose wife who is also a very high profile. And I think was an actress on one of the Housewife series. And he is in an entirely different business from us. He was a sort of class action sort of contingency fee lawyer and so what he had were a very large number of smaller most claims and clients. That business - that business consists of amalgamating thousands and thousands of cases and then pursuing them on a group basis. And so, you can't in that business have the same kind of corporate arrangements that we have. So we're able by contrast to do traditional institutional financings with full and negotiated documents the other side has counsel and they negotiated those, inappropriate cases, we take a security position. It's a very - and we established payment conduits usually through the law firm. So it's just an entirely different part of the legal industry.

Thanks very much.

Thanks, David.

The next question comes from Julian Roberts of Jefferies. Julian, please go ahead.

Hi there. Thanks for taking the question. I was just wondering if you could expand a bit on the new largest asset by deployments, which I think between you and the Sovereign Wealth Fund Partners $277 million of commitments and a large number of underlying claims. And also there is a point you make in the report that there is an equity element to your exposure. Is there any more detail you can give us on that, please?

My - obviously my peroration of saying that I'll talk a little bit about it now, because I won't be able to say anything more about it was unsuccessful I guess. So, as is always the case with our investments unless for some clients or judicial reason they become public, what we've said in the disclosure is all that we're going to be able to say publicly. If you look at the disclosure, what we've said about this case is that as you say it's a large manner, but it's an antitrust matter. It involves a major global company. There are more than 500 underlying claims underlying cases. So, we've released at least that much information. But beyond that, I am afraid that's all that we're able to stay at the moment.

Okay. And on the pre - the matter that was previously the largest by deployments, it looks like, you've added a couple of cases to that investment. And I think I can tell from the investment data especially you released that there may have been a little bit more of a recovery in one of those underlying cases. Am I bucking up the wrong tree or has there been a bit of positive movement from there?

Let's see, Jon Molot, are you able to address that? Maybe doing as well, yes, may have to come back to you.

Yes.

Maybe doing as well, yes, we may have to come back to you.

Right. You have to come back to on the specifics. So I can say as a matter as a general matter with respect to where we take a position across multiple cases, where we have a high conviction and we see profit opportunity. It's increasingly common that we will continue to make additional investments either with the same counterparties who want additional capital or with new counterparties that we've talked to who are in the same situation, businesses in the same situation. And it's also not uncommon in something with that many things involved that there will be smaller settlements along the way that will generate some returns. It is always - for your question about do you extrapolate from those? It's always a tricky question and particularly I understand given the constraints we have on disclosure about when you take - how much you read into early resolutions? And you can imagine if there is a large category of litigation, multiple pending suits against people in the same industry and maybe guilty of the same misconduct. If they settle - if one or two if on the outskirts end up settling that may not will tell you very much, you may not set a benchmark, say for what the other settlements will be. But there could be some more significant ones that do tell you more. So, I guess, I'd say, it's not unexpected that there would be both additional and follow-on investments and there would be some resolutions whether the resolutions are a marker of when and the quantum that is involved in the future ones, I don't want to - that - it does happen, right? Things start to settle and then there will be multiple settlements. And a benchmark can be established, but I can't really say whether in this particular instance, that would be a warranted conclusion.

And I just add to that, I’d just sort of add that, Julian, a really good example of what Jon just described is what you saw in the large pool of investments that we concluded in the first half of last year. So I make that the years run by one year but the spacing is right. In 2016, for example, we started investing in that area and we only had one deal at the time. And so we closed one deal and we waited and we watched and we - our conviction grew. And then in 2018, we did more deals with more counterparties and in 2019, we did yet more deals with more counterparties. And we amassed a position, which then resolved satisfactorily for us very successfully for us in 2020. So that's an example of how you see Jon's concept playing out in practical reality.

The only difference I would point out is in that case, we kept putting on more money, which did reflect our conviction. But then all of the successes came at the end whereas in the one I think you've identified, we've continued to put out more money, but we also have seen some settlements that before we get to the end. So, we were on the right track there, but I can't - I can't draw conclusions about what it means for the future.

Yes. Understood. That I remember, I remember watching the ones that Chris has just referred to as they went through the spreadsheets getting bigger and then with some just I am under thinking when they all seemed to conclude or lots of them conclude once I was thinking they're probably not that many defendants. But, of course, there's no way of telling with this new lots. I mean, there are. But thank you, guys. That's. That's very helpful. Thank you.

So we are going to introduce first questions between the phone and the webcast. So don't spare a few things, many questions on the webcast, but I think we're going to go next to one more telephone question.

The next question on the telephone comes from Andrew Shepherd-Barron of Peel Hunt. Andrew, please go ahead.

Great. Thanks good afternoon. Thanks for taking my call. This is a sort of follow-up question into the call to that question about where the new money is going and obviously that this large antitrust portfolio of cases. Can you make - can you make a comment about in terms of your business over the years and sort of more to sometimes it’s between doing single cases and cross-collateralized portfolio portfolios. Might be a purchase from an existing case, which this one looks as the purchased of existing interest because the cash is being deployed in the same period that it was committed. But typically, I’ve always understood the form of legal - future legal expenses rather than buying into an existing case and also the split between whether you are all supporting legal firms, i.e. taking cases from them and therefore equivalent to the contingency arrangement paying their legal fees or by or taking corporate i.e. bit basically taking other cases from a corporate and replacing their balance sheet and bringing all the advances that you can. What - is there a trend that's going on here? Could you talk a little bit more about, that I am trying to understand where we should expect in the next two to three years where we are likely to see a focus.

So, why don't I start on this and Jon, I am sure will chime in, as well. But even before I start, what I'm going to do is, actually knit your question together with a couple of the other questions that we've had of a similar vein from the webcast. So, for example, we've had also Mark Clabber asking, is it fair to say the much of the existing book of cases is corporate versus corporate, whereas the new very large case looks more like the class action? And if this is the case that that represent a shift in strategy and we've similarly had Derry O'Callaghan ask – well, first of all, say, congratulations to the Burford team for stellar results. Thank you very much for that. And my question relates to some of the new deployments. As you pointed out, case sizes are becoming larger and more complex, can you give us some color on this complexity and how it impacts on the risk profile of the overall portfolio? So, I think the way to approach this discussion is to think about what we do and the context of the development of the legal finance market. So, when we started, we were predominantly providing as you say, Andrew fees and expenses financing. And that was the corporate desire was for companies to get the cost to the increasing cost of litigation off their P&L and to put it on to someone else. And frankly, they've been care that much where it went. And so, in those days, the typical dynamic was the company would go to the law firm and say, figure out a way to do this case for me without me paying your high hourly fees on a current basis. And it was sort of up…

Sure. I actually think the questions really and obviously your description, but captured the evolution of our business. And I don't think that simply because there has been a trend toward expansion and growth, meaning we went from single cases to law firm portfolios to doing deals with corporates that involves not only covering their costs but to litigate a series of lawsuits, but actually monetize their litigation receivables and accelerated recoveries. It is true that the evolution has been to grow and expand and deploy capital in new ways that's useful both to corporate clients and law firms, but that has not meant we are leaving behind the businesses where we already were seeing - enjoying success. And I mean, we still do single cases and some of those single cases in the past you've seen from our results have produced very attractive returns that have been meaningful and we have lots of single cases in our portfolio right now that we're monitoring that have a great potential. And it is true that when you do a portfolio, you are putting out more money at a time and you are mitigating risk the single case there is a risk of a complete loss of binary risk. But as part of our portfolio, we still think they are attractive. And you never really know as long as there we have the kinds of law firms and corporate clients, we want to have as our counterparties, we want to do business with. You do a single case with someone it works well, that is the next portfolio. That's the next monetization opportunity with a corporate. And so, I think are not leaving behind, instead, we just continue to expand.

So, let's switch gears to some other questions that we've had from the webcast. And we'll start with a question from Trevor Griffiths. There is the definition of undrawn commitments included in total portfolio on Slide 5 refer to commitments from investors in funds you manage or commitments entered into by the company in respect to case investments or both. I am trying to understand the movement in BOF-C, which seems a bit it lack with the other elements of the portfolio. Yes, it has - I have - we settled on the term commitment before we were a fund manager and I had long regretted the fact that we now have two different kinds of commitments in the business, which does cause this confusion from time-to-time. But to be clear, when we talk about commitments to investments or commitments in our portfolio, we are talking to the commitments that we have entered into by Burford to finance matters. We're not talking about commitments that the private fund investors have made to give us capital. And we address the latter in an entirely separate asset management discussion. The reason I think Trevor that you're seeing a little bit of aberrant movement around BOF and BOF-C and so on, I think is because of the combination of the maturity of BOF. And so, just to refresh everybody, while we raised BOF and BOF-C at the same time, BOF-C is the sovereign wealth funds arrangement and BOF is the traditional multi-investor June 2020 fund. They have different – they were different sizes obviously and they have different lengths of investment period. The other thing is that BOF-C is excluded from a certain category of investments as we've disclosed before. And so, what has happened is that BOF has filled up more rapidly…

That's right. Thanks for the question. We don't – yes, I would never project what our IRRs would be in the future. I will say that our underwriting process become no less rigorous that the expansion into new lines has been because of the presence of new opportunities. And I don't see that we've had for the risk involved sacrifice pricing. There is always the question, we've always said that we price differently depending upon risk and duration. It's risk-adjusted returns that we pay attention to and we model everything very carefully. So, for single issue, one year appeal, where we feel fairly bullish that there is going to be an affirmance of an existing verdict and you already have all the information because that the trial judgment has been rendered, that's going to commend different pricing from a suit that's just being filed, where there is factual uncertainty. There is many ways you could - there are obstacles along the way and the duration will be longer. So our pricing has always varied depending on risk, but our approach to pricing has not markedly changed. I think probably if anything with experience our underwriting continues to get better or modeling has much more data to draw upon and we have much more experience but haven't changed our underwriting standards.

But I am conscious that it's now one minute past the hour. With your indulgence, I think we can probably have time for two more questions. But I think after that, we'll probably close this and but always of course welcome your direct interaction with any of us. Why don’t we next do a question from Dennis Twak . Commitments have been fairly flat over the recent years. What's limiting the growth in commitment? Is it capital? The size of your sourcing team? Or the fact that there is simply not that many attractive cases in any one period to be funded? So, Jon, Jon why don’t you comment on that? But I think I think that, one of the elements obviously is, Dennis is, our selectivity as well. We continue to say yes to a single-digit percentage of the things that come in the door.

Right. It's interesting. I would say that is the flip side of Ed Quail’s question in terms of the way Chris described our standards. Our standards remain the same and that means we say no to most things and we ensure that our pricing is commensurate with the risk to generate the returns we think are justified. I think frankly COVID slowed us down, right? I think when you say they are flat, it's not just that the commitments were flat, right? We did see a dip and then we came back up and now we've come back up further still. And I feel like the market is quite robust right now. I am seeing lots of great opportunities that I like and want to invest in. So, I don't have the data at my fingertips. But I don't - I think there has been a period that we had to get through then. And we mentioned before, the core process is still delayed, but the flow of deals has come back. And I am optimistic that the flow of deals can increase when our business development origination teams are allowed to get back out into the market and meet with people in person. And so, actually plenty of good opportunities and I am hopeful that the growth resumes – we are on a growth trajectory from where we were, but we’d like to see more.

And finally, a question from Bruce Anderson. We've talked about some of this. Let me read the question and then we'll sort of say - dissect it a little bit. Can you comment on the level of new commitments and the fact that only 14 new commitments were made in the period? While the value of new commitments in the period is very high, the level of new commitments in terms of numbers was less than in the prior periods. And then, Bruce, cite some numbers and let me come back to that in a second why were their associate commitments made in H1? It’s because the market really has yet to pick up or was it the conscious decision not to go after more business? And if so what was behind it? By going further up market in terms of value, are you allowing the competition to take the space in that sector of the market than you previously occupied? So, just on the subject of the actual numbers, we provide two different sets of numbers. We provide total business activity numbers across the - all of the platforms in which we invest. So, traditional core litigation finance that we put on the balance sheet and in BOF and BOF-C, pre-settlement - sorry, post-settlement things that we put in the base fund, strategic value investments and so on. And then, we separately provide in tabular form a huge amount of detail both in our interim report and then even more on our website tables information just about the capital provision direct assets. And so, one of the targets I see in your question, Bruce, is that you mismatch the total number against the capital provision direct. So we did 14 capital provision directs matters in the first half, just…

This concludes today's conference call. Thank you for joining. You may now disconnect your lines.