Burford Capital NYSE: BUR executives used the company’s first-quarter 2026 earnings call to address the recent setback in its YPF-related litigation, while emphasizing what management described as the strength, cash-generating potential and diversification of its core litigation finance business.
Chief Executive Officer Christopher Bogart said the YPF loss was “disappointing” and “frustrating,” but stressed that the impact was non-cash. “In fact, we have made a nice cash profit from it,” Bogart said, adding that Burford has generated more than $100 million of cash profit from the investment.
Burford reported that it had applied its valuation policy and taken a substantial write-down of the YPF asset value following the adverse decision. Bogart said the company expects little financial statement activity related to YPF for several years because the next phase is likely to involve arbitration, a process he described as confidential and slower moving.
YPF Focus Shifts Toward Arbitration
Bogart said Burford plans to file an en banc petition asking the full U.S. Court of Appeals to reconsider the recent panel decision. He said Burford’s filing would describe the ruling as “egregiously wrong and indefensible.” However, he also acknowledged that obtaining a different result in the U.S. courts is “realistically difficult.”
Management said arbitration remains a viable alternative path. Bogart said the arbitration process would allow Burford to advance “essentially the same claims for the same damages.” He noted that Burford has financed international arbitration matters before, including a prior case against Argentina involving the expropriation of two airlines.
Bogart said Argentina has lost frequently in investment treaty arbitration, citing company materials indicating that 86% of more than 50 cases brought against Argentina have resulted in a pro-investor outcome. In response to an analyst question, he clarified that the 86% figure refers to bilateral investment treaty arbitrations, not ordinary commercial arbitration.
Management also sought to distinguish future YPF costs from the company’s historical spending on the matter. Bogart said much of the previous spending was structural, including costs to obtain the interests, rather than litigation expense. He said future costs should be consistent with complex arbitration matters, historically in the $10 million to $20 million range, and “nothing close to $100 million.”
Core Portfolio Becomes Central to Investor Message
Bogart said YPF had dominated investor discussions for years and that the company now expects the market to focus more on Burford’s core business. He described that business as a global portfolio of hundreds of litigation assets that move through a “litigation conveyor belt” toward resolution.
Burford said it has 237 active assets, many of which are multi-case arrangements, representing roughly 900 underlying cases. Bogart said the portfolio is broadly diversified and that 35% of it consists of cases from 2015 to 2019, which he said likely would have resolved earlier if not for the pandemic.
The company also reported more than £1 billion of undrawn definitive commitments. Bogart characterized those commitments as already-sourced matters that could represent close to another £2 billion of future cash proceeds if deployed and returned at Burford’s historical rates.
Bogart said Burford’s existing portfolio, excluding YPF, is modeled to generate more than $5 billion of future cash. He said the company’s modeling assumes a 110% return on invested capital, compared with historical ROIC of 82%, because the current portfolio mix differs from the historical book and because Burford has learned not to pursue smaller cases that dragged down returns.
Quarterly Activity Shows New Commitments and Realizations
Chief Investment Officer Jonathan Molot said new business was proceeding at a “steady pace.” Burford reported $133 million of new definitive commitments in the first quarter, which Chief Financial Officer Jordan Licht said was 25% higher than the average for the first quarters of 2024 and 2025.
Deployments totaled $108 million in the quarter, which management said was broadly in line with recent quarterly averages. Realizations were $97 million, lower than the prior-year period, which benefited from a nearly $100 million single-asset realization.
Molot said the quarter’s realizations came from 25 assets, including six that generated at least $5 million and two that generated at least $20 million. He also said nine of the contributing assets were from pre-COVID vintages, which he said showed that older matters are moving through the portfolio.
Looking ahead, Molot said Burford has 36 trials and merits hearings scheduled during 2026 across its portfolios, compared with 23 at the same time last year. He cautioned that scheduled proceedings can be delayed, but called the increase a “positive indicator.” He also said Burford sees 23 assets with the potential to generate double-digit millions or more in realizations during 2026.
Liquidity and Leverage Remain Key Topics
Burford said it ended the quarter with $740 million of cash and marketable securities. Bogart said the company intentionally raised $500 million in January to strengthen its position and emphasized that Burford has not relied on YPF cash in its forward-looking cash flow modeling.
Management said Burford has no debt maturities until 2028 after redeeming its 2026 U.K. bonds earlier this year. Licht said the company’s outstanding debt now consists entirely of 144A notes with incurrence covenants only, following the redemption of the remaining U.K. issuance.
Licht said Burford’s debt capital has a weighted average life of 5.5 years, compared with weighted average lives of 2.6 years for concluded assets and 3.4 years for active deployments. He said the company’s incurrence test is 2.0 times debt to equity, while its current level is 3.5 times.
Bogart said Burford’s debt-to-equity ratio is higher than management would like following the YPF write-down, and that the company intends to deleverage over time. Still, he said management is “not alarmed by the current posture of the business,” noting that Moody’s kept Burford’s rating at Ba1 while S&P lowered it one notch to BB- with a stable outlook.
Potential cash-conservation measures are also under review. Bogart said the dividend remains a topic of discussion with shareholders, noting that many investors do not focus on yield. He reiterated that share repurchases are not appropriate at this point.
Management Says Growth Can Fund Deleveraging
Bogart said the company had already decided before the YPF outcome that it would no longer use new debt to close funding gaps between business opportunities and organically generated cash flow. He said that approach could constrain future growth if cash inflows and new business opportunities do not align, but described it as a growth-rate risk rather than a liquidity risk.
Executives said Burford will continue to focus on harvesting cash from the existing portfolio while also originating new business. Molot said the company has expanded its business development presence, including adding people in Spain and Korea.
“We’ve gotten to a size and scale where we can use the money coming in from prior cases to fund the new commitments,” Molot said. He described that position as a competitive advantage in an industry where new entrants may struggle to raise additional capital before their earlier investments produce returns.
Bogart closed the call by saying the company aims to “turn the corner” from the YPF-driven narrative and highlight the cash-generating potential of the core business. “We’re very excited about what that has to offer,” he said.
About Burford Capital NYSE: BUR
Burford Capital NYSE: BUR is a leading global finance firm that specializes in litigation and arbitration funding, risk management, and asset recovery. The company provides capital to law firms and corporate clients to finance legal fees and associated costs in commercial disputes. In exchange for funding, Burford shares in any awards or settlements, enabling clients to pursue meritorious claims without bearing upfront legal expenses.
Founded in 2009 by Christopher Bogart, Burford was among the first firms to establish a dedicated litigation finance business.
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