Burford Capital: The Litigation Jackpot

As litigation finance becomes increasingly institutionalised, Burford is capturing record deployments and portfolio activity, with 61 assets already realising proceeds YTD25. Global trade uncertainty and rising corporate disputes are expanding demand for capital-efficient legal finance, while law firms and corporates look to monetise claims. Burford’s scale and track record cement its leadership in an industry growing well above market GDP.

Burford continues to deliver top-tier returns, with YTD25 net income of $100 million despite softer fair-value gains and lower realised proceeds. The firm’s historical gross IRR of 27% and low loss rate of 13% remain intact. Management ownership (> $200 million, ~9%) aligns strongly with shareholders, while its $2.36 billion tangible book value and 22% net-debt-to-tangible-asset ratio underscore balance-sheet strength and resilience.

The YPF litigation remains transformative. Oral arguments before the U.S. Court of Appeals took place in October 2025, with a decision expected in coming months. Burford’s consolidated fair value for the case rose to $2.5 billion, up from $2.3 billion in June, driven by the June Turnover Order and passage of time. A favourable appeal ruling and any settlement with Argentina could be material catalysts for shareholder value, with Burford’s economic interest estimated at over $6 billion including interest.

• YPF Appeal Developments: Oral arguments were heard in October 2025, with a ruling expected in coming months. Any movement toward enforcement, settlement or a favorable decision could materially re-rate the stock. Accruing post-judgment interest further increases Argentina’s cost of delay.

• Cash Generation & Portfolio Activity: Burford reported $389m in cash receipts YTD25 and 61 asset realizations, the highest on record, showing strong capital recycling and liquidity for new deployments.

• New High-Profile Case Wins: Active deployment momentum and a record number of realizations suggest strong case throughput. New large wins or settlements could diversify earnings beyond YPF and reinforce Burford’s valuation framework.

• Further Market Adoption of Litigation Finance: Corporate legal teams are increasingly turning to litigation finance amid tighter budgets and capital discipline. Broader acceptance in Europe and the U.S. should drive portfolio growth and recurring fee income.

• Wider Institutional Adoption of Litigation Finance: Recent credit-rating upgrades from Moody’s and S&P highlight the asset class’s growing acceptance. Over time, institutional inflows and co-investment partnerships could reduce Burford’s cost of capital and amplify AUM growth.

• Global Expansion and Market Penetration: As Burford scales its platform beyond North America and the UK, emerging markets and cross-border enforcement opportunities offer a long-duration growth runway.

While the YPF case ruling was favorable, Argentina has a history of delaying payments. Legal maneuvers and jurisdictional challenges could prolong the collection process. However, Burford has begun enforcement proceedings in multiple jurisdictions to mitigate these risks.

Litigation finance remains a relatively new asset class, and regulatory changes could impact Burford’s ability to operate. Increased disclosure requirements or restrictions on fee structures could alter the company’s profitability. However, the industry is gaining acceptance, which could counterbalance regulatory risks.

The timing of litigation outcomes remains uncertain. While Burford has an impressive historical win rate, some cases take longer than expected to resolve. Investors should be prepared for periodic revenue fluctuations due to the nature of the legal system.