Burford Capital Share Discussion Threads

[lomax99] 27/6/2019 18:21

IC today:Burford banks $100m from Petersen claimBurford Capital (BUR) has sold a 10 per cent stake in its entitlement to a landmark case for $100m (£78m), as the litigation finance group and the claimant it backs notched up another victory in US courts.On Monday, the US Supreme Court rejected an attempt by Argentina to block a lawsuit brought by a bankrupt shareholder in YPF, the state oil company expropriated by the South American country in 2012.Argentina had argued that US courts lacked jurisdiction, though Madrid-based Petersen Energia – which is being funded by Burford – has so far successfully argued that the nationalisation triggered provisions for a tender offer to shareholders.The case will now return to the trial court, though Burford stressed that the latest decision "relates purely to a preliminary jurisdictional question and does not foreshadow any particular result in the underlying litigation".But the fact that claims are assured a hearing in US courts is another boost to an asset for which Burford paid just $18m in 2015. For proof, Burford announced it had sold a 10 per cent claim to any eventual payout, thereby valuing its initial investment at $1bn.IC ViewSecondary sales to date have netted Burford $236m, and this latest disposal was made to 11 institutional investors. That means around 40 separate parties currently participate in the Petersen secondary market, who have collectively bid up the value of the case by 25 per cent in less than a year. That also means the shares have fallen below three times Liberum's year-end NAV forecast. Buy at 1,569p.

[millennial] 27/6/2019 17:43

Woodford placing at 12 quid i hope

he needs his knees busted

[williamcooper104] 27/6/2019 07:50

Sounds like our future

[sogoesit] 26/6/2019 16:02

From their blog... another segment, arbitration:

[sogoesit] 26/6/2019 13:02

I think VCs look for returns at exit of 3-5 times over a 5 year period.
That is equivalent to an IRR of between 200% and 410%.
These tend to be binary bets as well.

I know the oil&gas industry tends to look for in excess of 35% IRRs over a project life (varying between 10 and 30 years).

EDIT: The IRR for an $18m investment in 2014 valued at $1bn in 2019 is over 25,000% (but these kind of figures for the IRR calculation are a bit meaningless).

[kirkie001] 26/6/2019 11:59

Over multi years? Probably 12%-20%, given risks, etc.... And that would be across a portfolio.

[riverman77] 26/6/2019 11:36

IRR of 25% may not be typical for normal investments, but given the binary risk that they might not get back anything I think this would be an absolute minimum. What figure do you suggest investors would be looking for?

[mad foetus] 26/6/2019 11:33

Someone whose real identity is unknown tells other people whose real identities are unknown that he is really rich, despite knowing that nobody believes him. What a peculiarly 21st century phenomenon

[gettingrichslow] 26/6/2019 11:10

Gairich, he has been spending a lot of time recently telling everyone how he used to bank with Coutts and how people 'wouldn't be able to afford to live on his lane'. But his recent disastrous foray into Kier has lost him around 3% of his portfolio value. Shame.

[gairich] 26/6/2019 10:48

Still looking for attention minerve?Why don't you tell us again how wealthy you are, that always cheers everyone up.

[mad foetus] 26/6/2019 10:22

It is worth highlighting that Petersen is still fraught with risks. The case has not yet been heard and even if BUR wins, enforcement could prove difficult. So the $1bn present valuation of the case reflects those uncertainties. How much higher would that be if the case was won and proved to be enforceable?

[williamcooper104] 26/6/2019 10:20

That said I think funds buying Peterson are looking at alternative credit/mezz targets of 8-12 and 1.25-1.5x

[williamcooper104] 26/6/2019 10:18

2 and 20 is a pretty standard PE target

With luck and leverage you can get there (some of the time)

[kirkie001] 26/6/2019 09:41

I'm not sure of very many business models where people look for investments to make an IRR of 25-30%!!! That compounds into seriously unrealistic returns in 3-4 years!

You might get lucky and get an ivestment that does that - hell, BUR's shares have done that for me, easily! - but it's not something you'd plan on. Their targets will be a lot lower.

[minerve 2] 26/6/2019 09:18

Burford Special Brew.

Drink it and you will move sideways. LOL

[riverman77] 26/6/2019 08:39

The institutions who bought in must be looking for an IRR of at at 25-30%. Assuming this takes another 3-5 years to settle, this implies the relaised value will be at least double the current valuation if successful. That would see Burford's stake increase to over 1 billion.

[winsome] 26/6/2019 08:28

That $100m portion of their investment could grow to $150m as the Petersen case progresses. Could take 2 to 5 years, even longer to settle. May not win at all. In the meantime that $100m from the sale could double or treble after reinvesting it over next 5 years. I can see the rationale.

[djderry] 26/6/2019 06:52

Law.com has an article explaining the rationale behind the latest Petersen sale with a short interview with Mr.Bogart.Perhaps someone would post a link,thanks.

[qruz] 25/6/2019 18:03

Can't get my head around it either brexitplus, Though Christopher Bogart & Jonathan Molot are very smart and ahead of the game, I'm sure they will get around it.

[minerve 2] 25/6/2019 17:54

Dulux is more active, no?

[brexitplus] 25/6/2019 17:20

Amazing how Burford can release excellent news, results and Petersen, and the share price drops.

Perhaps if there is bad news it will rise.

[sogoesit] 25/6/2019 15:35

Prudent risk management in my view.