[Starts Abruptly] -- and I will be your conference operator today. At this time, I would like to welcome everyone to the Burford Capital First Quarter 2025 Financial Results Conference Call Audio Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to Josh Wood, Head of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. It's great to have many of you join us both in person and via webcast for our 2025 Investor Day last month. We certainly appreciate you spending time with us today to discuss our first quarter results. On the call, as usual, we have our Chief Executive Officer, Chris Bogart; our Chief Investment Officer, Jon Molot; and our Chief Financial Officer, Jordan Licht. Earlier this morning, we posted a detailed earnings presentation, which we'll refer to during the call, and also filed our Form 10-Q, both of which you can find on our Investor Relations website. Before we get started, just a reminder that today's call may contain forward-looking statements that involve certain risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed during the call. For more information regarding these risk factors, please refer to our earnings materials relating to this call posted on our website and our filings with the SEC. We'll also be referring to certain non-GAAP financial measures during the call. Please refer to today's earnings materials and our filings with the SEC for additional information, including reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures. With that, I'll turn the call over to Chris.

Thanks very much, Josh, and welcome, everybody. We're very happy to be here, able to talk to you about a strong first quarter. I'll make three points about the quarter. We had robust new business in the quarter. Sometimes for us the first quarter can be seasonally slow. We often have a very busy December, as we did last year. It can take a little while for the law world to get back into gear. But this year we saw really a robust volume of new business, tripling definitive commitments, doubling deployments. And part of this is because, as we talked about at Investor Day, some of what we do is sort of bread-and-butter litigation, and some of what we do relies on something big and chunky occurring. And those don't come along predictably or reliably every quarter. But this quarter we did see the launch of a new U.S. claim family. So we're excited about that, and that certainly drove some but not all of the activity during the quarter. We also saw very strong realization and cash generation activity. Realizations were up significantly compared to either of the first quarters in the last two years, $163 million. That means over the last four quarters we have brought in really a very significant amount of cash. And as Jordan will talk later, we're sitting on a meaningful amount of liquidity, which positions the business very well indeed for new business and new flows out of the business as the year continues to build. And then in accounting terms, even though we watched the cash more than the accounting numbers, we saw revenue up significantly year over year. Significantly in this context for capital provision income, a 5x increase compared to the first quarter last year. And also an increased…

Thanks, Chris. Thanks to you all for joining. As Chris said, it was a very strong first quarter. Typically, there's much more that happens at the end of the year than the beginning, but we see this quarter outperform the last couple of years' first quarters. And I think that is emblematic of the trend that I've talked about on these calls successively, that after a period post-COVID where I was happy with what was in the portfolio, but you didn't see things moving through and producing cash results, we now have seen in successive quarters the portfolio performing. You're able to see about its quality what I've been saying for a long time. And now we've had a stretch where the portfolio really is performing. And I'm very pleased about it. In particular, it's maybe worth mentioning something I talked about on Investor Day that the diversification of the portfolio is not just across the risk metrics that we've talked about in the past, diversity of jurisdiction, subject matter, type of counterparty, all those various things that make a balanced portfolio, but also in terms of duration, risk profile, and size. And we often will invest in more moderate-sized, high-octane [ph] matters early in litigation or at the start of litigation where there's the potential for truly outsized returns, but those also take some time because they go through the litigation process. But those are counterbalanced by we also will do deals with corporates where we might put out a lot more money on a shorter-duration, lower-risk basis. And one example, which we talked about on Investor Day, is we had concluded in the first quarter a $100 million investment that we put on less than a year ago that ended up generating $125 million, and that ROIC is…

Thanks, Jon. Good morning, everyone. So I'm going to start on page 9. This is our total segment. When you look at total segments, this is a combination of the principal finance segment, which invests on behalf of our balance sheet, and the asset management segment, which invests on behalf of third parties. We'll go through each of these segments in greater detail. I'm going to cover four primary things today. First, it's going to be on how the existing business has progressed and the new business that we put on. We'll talk about income from asset management. We'll cover our expenses and then finish up with a discussion of liquidity and capital. Overall, $0.14 per share, which compares favorably to a negative $0.14 in the same period last year. The main driver of that difference is realized gains as well as unrealized gains, and I'm going to dissect that further when we talk about the portfolio. Jumping to page 12, Jon referenced the diversity, and I think those pie charts on the right of the page actually highlight that, whether it's diverse in terms of our exposure by geography or diverse with respect to asset type. The piece on this page with all the different numbers that I focus on as well is the $511 million. That's the middle red bar right on the bottom of the left-hand side. What that represents, ex-YPF is the fair value uptick associated with our portfolio, ex-YPF. That's hovered around a third of deployed costs. What that means is that should we continue to progress, given our historical returns, there's significant more revenue and opportunity associated with the book. Let's unpack that $3.6 billion a little bit more, jumping to page 13. Top of the page starts with revenue, and you'll see we…

Thanks very much, Jordan. I'll pick it up on slide 26, where we summarize a number of things about the business that I won't necessarily take you through point by point, especially since we spent quite a lot of time with you on these points on Investor Day. But since we have had Liberation Day that occurred the afternoon before Investor Day, and we've seen lots of market turmoil since then, I would just underline a couple of points about Burford's interesting business. Not only are we not negatively affected by things like tariffs and the other economic dynamics that are going on, these are the kinds of periods where historically Burford has seen some real benefit. The simple reality is that when businesses are under stress and when there is market turbulence and liquidity uncertainty and all of the other things that we see happening today, those are times when a couple of things happen that are good for us. First, businesses are even more unwilling than normal to write big checks to their lawyers. And so the kinds of capital solutions that we offer are especially appealing to businesses in these kinds of time periods. We started Burford in 2009 because law firms were overrun with requests from their corporate clients to do something about their fees in the financial crisis and in that time of compressed liquidity. And we've seen that dynamic repeat itself cyclically a few times since then. The other thing though that happens when businesses are under stress is that they feel pressure from you, from their investors, to do things like make their numbers and continue to grow and do all of the other things that unlock bonuses and drive corporate behavior. And what that does inside businesses is it can cause people to cut corners and to make bad decisions when they're under stress. Those bad decisions in turn often turn into opportunities for later litigation and arbitration. And we've seen that throughout our history as well. We are one of the few companies that actually enjoys the kind of period that we're seeing out there in the markets right now. And I just sort of underline the fact that Burford's business is really built to deal with adversity, deal with it and flourish in it. We're long-term players. We're here to stay and we're excited to be able to show you quarter on and quarter on our ability to continue to make progress towards the goals that we enunciated just last month at our Investor Day. And so with that, we'd be happy to take your questions.

[Operator Instructions] And your first question comes from the line of Mark DeVries with Deutsche Bank. Please go ahead.

I had a follow-up question on Jon's comments on YPF. You alluded to the IMF agreement that they had. Is that agreement or the dispersal of funds contingent upon them addressing the YPF settlement or is it more just kind of a conceptual idea that they put out as a priority that should be addressed at some point in the future?

The general IMF policy is that they don't do a program if there are outstanding debts due that are noted in the agreement and that they're not engaged in reasonable dialogue in order to address and solve. This is generally for the IMF, it's not a condition of disbursement that you have already resolved the debts, but you have to be working in good faith to resolve them as a condition. And what the program says that is true right now for the one that's been affirmed by the U.K. Supreme Court and that will be true when and if ours is affirmed by the U.S. appeals courts. So I don't know if that answers your question, but it's somewhere between the two things I think you laid out as possibilities.

Then just turning to the new commitments in the quarter, there was a pretty significant quarter-on-quarter change in the distribution and wristbands in the new commitments. Can you provide some qualitative insight into the types of business you added in the quarter relative to the last few? Is it related to Chris's comments about the launch of a big U.S. claim family, or are there some other forces there?

I think that's certainly part of it, Mark, and I would say without looking at the data that I don't have in front of me, I think that's no doubt a significant part. But, again we're providing these as sort of an effort to give people a little bit more insight because as we said at Investor Day, we don't think that you can treat all commitment and deployment dollars equally any longer. And so we're trying this out with you, and we'd welcome feedback on it, by the way. We're trying this out with you as a way of maybe trying to give a little bit more nuance. But as with all of these things, there's sort of a limit to how useful it is in this aggregate way because you do see differential performance within those bands. As Jon pointed out we had a large matter resolved very rapidly. That certainly performed differently than the way that we would have originally modeled it to have performed because we would have expected it to have been outstanding for longer, and it would have had both a different risk and return characteristic. But what you're seeing there with quite a lot of comparatively low modeled risk activity, some of that is certainly due to the fact that the new claimant's family comes with sort of a cross-globalized portfolio style approach.

Got it. Thank you.

Our next question comes from the line of Alex Bowers with Berenberg. Please go ahead.

Just one for me. The uptick in the unrealized gains from YPF-related assets during the quarter, I guess aside from sort of technical factors like the discount rates or the passage of time, were there any other contributing factors to the uplift in the valuation for those cases? Thanks.

The only other factor was the dynamic that I think we actually mentioned at investor day as well, where when you look at the Eaton Park side of the YPF transaction, Eaton Park obviously was the former New York hedge fund that is now in liquidation. And as that liquidation has progressed over time, you have seen our interest in the Eaton Park corpus continue to grow. And so during the period that grew from, I believe, 72% or 73% to 82% now. And so because of that growth in our interest in the Eaton Park activity, we will have seen an increase in value because of that. And actually, if you look at the consolidated numbers, you'll see an even more significant dynamic because that reached the point now of us actually having to consolidate it into our consolidated numbers. But, of course, that doesn't matter in the Burford-only outcome. But in true economic value, we have, in fact, taken now another, in round numbers, 10% of the Eaton Park entitlement. And that drives an increase in the balance sheet value of YPF in total.

Thanks. Just a quick follow-up on that. Did you have to pay for that increase or was it just part of the kind of liquidation process?

No, we pay for it as it happens, but we pay roughly around carrying value.

Okay. Thanks very much.

And our next question comes from the line of Randy Binner with B. Riley Securities. Please go ahead.

Hi. Thank you. I'm going to try to just clarify a couple of the previous questions, if that's okay. So on the new claim family that was part of the commitments, I didn't track in the answer. Is there a particular litigation type that that was related to, or is that more like a structural family?

So when we talk about claim families, again, because we have the handy resource of the Investor Day materials just behind us, you'll recall that we described the world as sort of falling into two buckets, the single case bucket where company A is suing company B and the issue doesn't really relate to anybody else or instances where there is multi-party litigation. An example of that is the publicly acknowledged cases that we're doing in the food proteins area where the U.S. government has found a price fixing conspiracy among proteins producers, meaning that many proteins buyers have claims for an overcharge. And we sometimes call those claims families because they're the same kind of claim being brought by a number of different parties and there is a degree of efficiency for us to put those claims together. We get to go to a number of those proteins buyers, use the proteins example, and say to them, look, we are already in these cases, we know them well, it's easy for us to add on the next marginal buyer, if you will. But those things, we can't create them, and they don't necessarily happen on a regular or recurring basis. Life being what it is, there is always somebody doing something naughty. And as we showed you in one of the charts for Investor Day, we tend to have between zero and two of these larger, chunkier, multi-case things happen in any given year. We didn't have one last year at all. And so what I was highlighting is that in the first quarter, some of the business that we wrote in the first quarter was for a new claims family. And that's an area where we'll now continue to watch that space. And if we continue to gain conviction and like what we see, it's also entirely possible that we'll put more capital to work in the same area as time passes.

Okay, that's really helpful. I appreciate that. And so I think the somewhat related follow-up I have is just looking at the new business slide, the slide 14 of the deck that you shared. I think it was good news that the commitment number was high at $158 million, but you had deployments that effectively offset that. And so the portfolio didn't grow in the quarter. And so I think the answer to this is somewhat obvious, but I'll ask it anyway, is that at some point, these commitments just offset deployments and we actually have a higher base. Is that the right way to think of getting to that goal of, I think it was doubling that portfolio by 2030? Is that the right way? Or more stuff comes in-- yes.

Yeah, sure. And that's why, if you think about this on a long-term basis, we're always thrilled to have the cases turning and the realizations coming in. But when you have periods with particularly high levels of realization, as this one was, then, yes, you may well have a period where the portfolio as a whole doesn't grow very much. Imagine a world when, if YPF comes in one day, that's a period during which one would expect, presumably, the portfolio actually to shrink. And that would be, from my perspective, an entirely happy outcome, even though we would then have to go back to growth.

Okay. Very helpful. I appreciate it. Thank you.

And there are no further questions at this time.

So I think that given that we took three hours or four hours of your time only a month ago, we, I think, have exhausted the webcast and telephone questions. So if anyone has further follow-ups, our IR team would be delighted to speak with you. But otherwise, thank you very much for your time and attention, and please give us some feedback on this new, more streamlined format and on some of the ways that we're presenting data for you. We're always happy to hear that. But until then, thank you all very much for your time and attention.

Ladies and gentlemen, that concludes today's call. Thank you all for joining us.