# Burford Capital Mixture of strong and weak activity in 2019

- Link: https://www.directorstalkinterviews.com/burford-capital-mixture-of-strong-and-weak-activity-in-2019/412806729
- Published: 2020-02-27T10:59:49+00:00
- Author: Amilia Stone

**Burford Capital Limited** (LON:BUR) recently released its first-ever trading statement,
covering cash activity in 2019. Group-wide commitments set a new record of $1.57bn,
a 24% increase. Overall deployments were almost flat compared with 2018, at £1.07bn.
In both, the Sovereign Wealth Fund (SWF) and fund arrangements increased their share.
It was, however, a quiet second half for realisations on-balance sheet in the core
litigation finance business. 2019 profits will be lower than in 2018, with Burford
indicating that net realised gains will be ca.$20m-$30m lower than in 2018 and net
unrealised gains ca.$50m-$70m lower.

 * **Returns:** While on-balance sheet net realised gains were lower in 2019 than
   in 2018, the cumulative RoIC since inception ticked up slightly to 93% on $1.2bn
   of realisations (85% on $1bn in 2018). The aggregate IRR also increased from 
   30% to 31%.
 * **Cash:** Group-wide cash generation increased 23% over 2019 to $997m. The majority
   of this increase was driven by post-settlement finance, which is shorter duration.
   The year-end cash balance of $192m was slightly up from $171m at the half year,
   but down on the $277m a year ago.
 * **Risks:** The investment portfolio is highly diversified, with exposure to more
   than 1,100 claims. However, it retains some very large investments, which means
   revenue could be volatile, particularly in the smaller divisions. The Petersen
   case shows that this volatility is not simply a negative.
 * **Investment summary:** Burford Capital has already demonstrated an impressive
   ability to deliver good returns in a growing market, while investing its capital
   base. As the invested capital continues to grow, we anticipate that the litigation
   investment business will continue to produce strong earnings growth.

[DOWNLOAD THE FULL REPORT](https://www.hardmanandco.com/wp-content/uploads/2020/02/Burford-Capital-report-26-February-2020.pdf)

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