Burford Capital signals confidence in doubling business by 2030 amid 15% portfolio growth

Earnings Call Insights: Burford Capital Limited (BUR) Q3 2025

MANAGEMENT VIEW

* CEO Christopher Bogart addressed recent market volatility related to the YPF litigation, emphasizing that "it would be extraordinary for the appellate court to dismiss the YPF case on this ground on Forum non grounds now for several reasons." Bogart highlighted the strength and consistency of the Southern District of New York and Judge Preska’s low reversal rate. He stated, "the market seems to us to have completely overreacted to the appellate argument" and reiterated management's bullish stance on the YPF case while stressing its proportional role in the broader business.
* Bogart shared that "definitive commitments up more than 50%. The overall portfolio is up 15% already year-to-date, that's 20% annualized. That is well above the level to achieve our goal of doubling the business by 2030." Deployments in the third quarter were up 61%, and the company has seen an increased number of large cases this year.
* He described the current year as having "a great year for the business," with the portfolio seeded for "substantial realizations in the years to come." Four large case wins this year could each generate more than $100 million if held at current levels, though these outcomes are not yet fully reflected in accounting figures.
* The company is maintaining a cautious approach to buybacks, with Bogart noting, "we don't think it's prudent at this moment...to use corporate funds to buy back stock," citing a preference for capital allocation toward growth and a careful approach to leverage.
* The appointment of Bank of America as a corporate broker was highlighted as "yet another step forward in both the U.S. and the U.K. markets."
* CFO Jordan Licht stated, "year-to-date, we're down in capital provision income revenue. A lot of that was driven by extension of fair model durations," detailing how duration changes can affect fair value but do not necessarily impact overall case outcomes.

OUTLOOK

* Management reaffirmed confidence in the long-term plan, with Bogart stating, "we are sticking to our prediction of being able to double [the business] by the end of 2030 as we laid out at Investor Day."
* Licht emphasized significant upside in unrealized gains with "fair value unrealized gains associated with that, which is around 32%. So as mentioned, there's significant upside to come in terms of future gains to the extent we hit our historical ROICs."
* The company continues to prioritize organic and inorganic growth, focusing on portfolio expansion and maintaining a diversified asset mix.

FINANCIAL RESULTS

* Licht reported "$310 million of realizations this year." He noted that "cash receipts from asset management was approximately flat year-to-date at $17 million between '25 and '24."
* The company sits in a "great cash position at $740 million," following a recent issuance of $500 million notes in July 2025. Debt maturity in December 2026 is being addressed with this liquidity.
* Operating expenses saw a one-time impact from "mechanical acceleration of tenure-based awards that vested in this period but haven't been paid out." G&A for the year was up due to "increased costs associated with policy and planning."
* Burford reported a debt to tangible equity covenant ratio of 0.9x, with an average debt maturity of approximately 5 years and a weighted average cost of 7.4%.

Q&A

* Mark DeVries, Deutsche Bank: Asked about timing of the Second Circuit appeal on Argentina’s YPF shares. Bogart responded, "that appeal is going to be fully briefed...by sometime in December" and predicted a likely event in 2026, but not 2025.
* DeVries also questioned realization trajectories post-pandemic. Bogart pointed to the rolling 3-year realization, stating, "there's quite a lot of activity going on...we have more events, more trials, more hearings...scheduled for the next 12 months than we had for the 12-month period a year ago."
* Julien Roberts: Inquired about the impact of extended case durations. Licht estimated a "$40 million to $50 million of impact when you look at that compared to the overall deployed cost fair value associated with the non-YPF book," without specifying the cases.
* Jonathan Alexander, Evergreen: Asked about the rationale for not initiating a buyback with anticipated YPF proceeds. Bogart reiterated caution due to the unpredictability of case cash flows relative to debt obligations.
* DeVries followed up on trends in recent commitments and deployments. Molot highlighted continued portfolio diversification, while Licht did not correlate deal size with expected returns, noting smaller deals can also offer quicker monetization.

SENTIMENT ANALYSIS

* Analysts demonstrated a neutral to slightly negative tone, pressing for clarity on YPF timing, realization patterns, and capital allocation with persistent questions about the buyback strategy and realization timelines.
* Management maintained a confident and measured tone in prepared remarks, repeatedly expressing long-term optimism and defending current strategies. In Q&A, management responses became more detailed and occasionally defensive, particularly regarding buyback rationale and realization predictability.
* Compared to the prior quarter, management’s tone shifted from celebratory and growth-focused to more explanatory and defensive in addressing market concerns and YPF-related share price volatility.

QUARTER-OVER-QUARTER COMPARISON

* The current quarter saw a marked increase in management’s focus on explaining the YPF case’s appellate risk and its impact on market perceptions, compared to the previous quarter’s emphasis on broad portfolio growth and new business wins.
* Guidance language remained consistent on the 2030 doubling target, but the tone shifted to address shareholder frustrations with share price performance and capital allocation strategy.
* Analysts continued to focus on litigation timelines, realization rates, and capital deployment, but the intensity of questions regarding the YPF case and share buybacks has increased.
* Key metrics shifted to highlight realized and unrealized gains and impacts from case duration changes, whereas the previous quarter focused more on net income growth and new commitments.
* Management confidence in the business model and portfolio resilience remained, but there was a greater emphasis on risk management and prudent capital allocation.

RISKS AND CONCERNS

* Management identified litigation delays and unpredictability of court schedules as ongoing challenges, stating, "delay and a lack of predictability is something that is a constant frustration to anyone involved in litigation."
* There was explicit acknowledgement of the risk inherent in using debt to finance buybacks versus deploying capital for business growth.
* Analysts expressed concern over realization timing and the impact of extended case durations on reported income.
* The YPF case’s appellate outcome and its associated market volatility were recognized as significant current risks.

FINAL TAKEAWAY

Burford Capital’s management underscored continued confidence in the firm’s long-term strategy and portfolio performance, emphasizing robust growth in commitments, a strong cash position, and the expectation of doubling the business by 2030. While management acknowledged shareholder frustration with share price and market reaction to the YPF litigation, the focus remains on prudent capital allocation, portfolio diversification, and maintaining the business’s growth trajectory amid litigation uncertainties and timing risks.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/bur/earnings/transcripts]

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