Investor letter, October 2023

Burford is a litigation funder whose YPF investment yielded a $6.2B verdict (accruing $300M+ interest annually) in their favor during Q3, significant relative to Burford's $3B market cap; the author believes the market is overly discounting the award and that Burford is worth far more than Mr. Market's $13 per share, with potential for eye-popping returns even at a discount.

“Burford Capital (BUR): Burford is a litigation funder that funds legal cases for a portion of the proceeds. The company's downside is limited to the cost of funding a lawsuit, and their upside is limited only by the size of the settlement or jury award. Burford's most successful investment to date has been YPF, where they funded a case against the government of Argentina, which privatized the YPF oil company without providing compensation to shareholders. During the third quarter, a judge in New York ruled in favor of Burford and other YPF claimants in every way possible. Burford's share of the verdict is $6.2B and accruing interest at over $300M per year. This is quite significant relative to Burford's $3B market capitalization, though the market is discounting the award because Argentina has a history of trying to avoid paying.”