Q2 2026 Burford Capital Ltd Earnings Call

August 6, 2026

Speaker #1: Hello, and welcome to the Burford Capital second quarter 2026 financial results conference call and webcast. All lines have been placed on mute to prevent any background noise.

Operator 2: Hello. Welcome to the Burford Capital Q2 2026 Financial Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star one on your telephone keypad. I would now like to turn the conference over to Josh Wood, Head of Investor Relations. You may begin.

Operator: Hello. Welcome to the Burford Capital Q2 2026 Financial Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star one on your telephone keypad. I would now like to turn the conference over to Josh Wood, Head of Investor Relations. You may begin.

Speaker #1: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, please press star 1 on your telephone keypad.

Speaker #1: I would now like to turn the conference over to Josh Wood, Head of Investor Relations. You may begin.

Josh Wood: Thank you, Sarah. Good morning, everyone. We hope you're all enjoying a nice summer. Thank you for taking time to join us today to discuss Burford's Q2 results. On the call, we have our Chief Executive Officer, Chris Bogart, our Chief Investment Officer, Jonathan Molot, and our Chief Financial Officer, Jordan Licht. Earlier this morning, we posted a detailed earnings presentation, which we'll refer to during the call. We also filed our Form 10-Q. If you've not already, you can find those materials on our investor relations website at investors.burfordcapital.com. Before we get started, just a reminder that today's call may contain forward-looking statements that involve certain risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed during the call.

Speaker #2: Thank you, Sarah. Good morning, everyone. We hope you're all enjoying a nice summer and thank you for taking time to join us today to discuss Burford's second quarter results.

Speaker #2: On the call, we have our Chief Executive Officer, Chris Bogart. Our Chief Investment Officer, John Molot. And our Chief Financial Officer, Jordan Licht. Earlier this morning, we posted a detailed earnings presentation, which we'll refer to during the call, and we also filed our Form 10-Q.

Speaker #2: If you've not already, you can find those materials on our investor relations website at investors.burfordcapital.com. Before we get started, just a reminder that today's call may contain forward-looking statements that involve certain risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed during the call.

Josh Wood: Before we get started, just a reminder that today's call may contain forward-looking statements that involve certain risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed during the call.

Speaker #2: For information regarding these risk factors, please refer to our earnings materials relating to this call posted on our website and our filings with the SEC.

Josh Wood: For information regarding these risk factors, please refer to our earnings materials relating to this call posted on our website and our filings with the SEC. We'll also be referring to certain non-GAAP financial measures during the call. Please refer to today's earnings materials and our filings with the SEC for additional information, including reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures. Without further delay, I'll turn the call over to Chris.

Speaker #2: We'll also be referring to certain non-GAAP financial measures during the call. Please refer to today's earnings materials and our filings with the SEC for additional information, including reconciliations of these non-GAAP financial measures, to the most directly comparable GAAP measures.

Speaker #2: And without further delay, I'll turn the call over to Chris.

Speaker #3: Thanks very much, John, and welcome, Josh, and welcome, everybody. Just before we started, I was reflecting with John that we've been doing earnings calls now for 17 years together at Burford.

Chris Bogart: Thanks very much, Josh, and welcome, everybody. Just before we started, I was reflecting with John that we've been doing earnings calls now for 17 years together at Burford. I think on probably almost every single one of those calls, we have said that we run this business on a cash basis, that cash is what's important to us, and litigation, at the end of the day, meanders through its process until it ultimately gets to cash. On that basis, we had a really good quarter. We brought in a good amount of cash, significantly more than we've done in the recent past. We have lots of liquidity, and that translates into real flexibility for us on the balance sheet with more than $700 million in the bank.

Speaker #3: And I think on probably almost every single one of those calls, we have said that we run this business on a cash basis, that cash is what's important to us, and litigation at the end of the day, meanders through its process until it ultimately gets to cash.

Speaker #3: On that basis, we had really good quarter. We brought in a good amount of cash, significantly more than we've done in the recent past.

Speaker #3: We have lots of liquidity, and that translates into real flexibility for us on the balance sheet with more than $700 million in the bank.

Chris Bogart: We have lots of liquidity, and that translates into real flexibility for us on the balance sheet with more than $700 million in the bank. I'll talk a little bit more, and Jordan will as well, about the balance sheet later in our presentation. What that does, the combination of cash on hand and cash generation gives us real optionality for this business. What you'll see on this slide, and I'm on slide eight, what you'll see on this slide are our priorities. Cash generation from the portfolio. We're excited that the portfolio seems to have some momentum.

Speaker #3: I'll talk a little bit more and Jordan will as well about the balance sheet later in our presentation. But what that does the combination of cash on hand and cash generation gives us real optionality for this business.

Chris Bogart: I'll talk a little bit more, and Jordan will as well, about the balance sheet later in our presentation. What that does, the combination of cash on hand and cash generation gives us real optionality for this business. What you'll see on this slide, and I'm on slide eight, what you'll see on this slide are our priorities. Cash generation from the portfolio. We're excited that the portfolio seems to have some momentum. After various periods in the doldrums, still recovering from the pandemic, unbelievably, we see some real progress. Strong liquidity and balance sheet management, and continued growth of the business. We're excited about where we are and about what the months ahead portend for the business. On slide nine, we've given you a few developments that have happened since the official close of the quarter.

Speaker #3: And what you'll see on this slide and I'm on slide 8 what you'll see on this slide are our priorities. Cash generation from the portfolio, we're excited that the portfolio seems to have some momentum.

Speaker #3: And after various periods in the doldrums still recovering the from the pandemic unbelievably, we see some real progress. Strong liquidity and balance sheet management and continued growth of the business.

Chris Bogart: After various periods in the doldrums, still recovering from the pandemic, unbelievably, we see some real progress. Strong liquidity and balance sheet management, and continued growth of the business. We're excited about where we are and about what the months ahead portend for the business. On slide nine, we've given you a few developments that have happened since the official close of the quarter. We've done this from time to time, a snapshot of developments when there have been some significant levels of activity after the formal close of a period.

Speaker #3: We're excited about where we are and about what the months ahead pretend for the business. On slide 9, we've given you a few developments that have happened since the official close of the quarter.

Speaker #3: We've done this from time to time a snapshot of developments when there have been some significant levels of activity after the formal close of a period.

Chris Bogart: We've done this from time to time, a snapshot of developments when there have been some significant levels of activity after the formal close of a period. What you see here is what I was talking about in terms of us having some excitement around momentum in the quarter. We had a strong arbitration result in a mining case that has been public and that people have been following for a while. This is a couple of African arbitration matters. The arbitral tribunal gave our client an award of more than $600 million. If that award were paid in full by Cameroon, we'd be entitled to $200 million or so of it. What that also does is effectively right-size that entire portfolio. That was a two-case portfolio of cases against Cameroon and Congo.

Speaker #3: And so what you see here is what I was talking about in terms of us having some excitement around momentum in the quarter. We had a strong arbitration result in a mining case that has been public and that people have been following for a while.

Chris Bogart: What you see here is what I was talking about in terms of us having some excitement around momentum in the quarter. We had a strong arbitration result in a mining case that has been public and that people have been following for a while. This is a couple of African arbitration matters. The arbitral tribunal gave our client an award of more than $600 million. If that award were paid in full by Cameroon, we'd be entitled to $200 million or so of it. What that also does is effectively right-size that entire portfolio. That was a two-case portfolio of cases against Cameroon and Congo.

Speaker #3: This is a couple of African arbitration matters. The arbitral tribunal gave us an award gave us our client an award of more than $600 million.

Speaker #3: If that award were paid in full by Cameroon, we'd be entitled to $200 million or so of it. And what that also does is effectively right-size that entire portfolio.

Speaker #3: That was a two-case portfolio of cases against Cameroon and Congo. The Congo case somewhat bizarrely from our perspective didn't succeed in arbitration, although there's a pending appeal for that case.

Chris Bogart: The Congo case, somewhat bizarrely from our perspective, didn't succeed in arbitration, although there's a pending appeal for that case. That's a cross-collateralized portfolio, where the win will, if paid, make a huge difference to Burford. We also, and the rest of this hasn't been publicly announced, we had a sizable US jury verdict during the month that again, if paid in full, would come close to $100 million for Burford. In Germany, we are a significant player in the German legal finance space, as many of you know, and we've been operating in Germany for quite some time. It's our largest market in continental Europe. There has been a fair bit of litigation in Germany, litigation and consideration in the civil courts, of just exactly how litigation finance and group claims are going to work.

Speaker #3: So that's across-lateralized portfolio where the win will if paid make a huge difference to Burford. We also and the rest of this hasn't been publicly announced we have a sizable US jury verdict during the month that again, if paid in full, would come close to $100 million for Burford.

Speaker #3: In Germany, we are a significant player in the German legal finance space, as many of you know. And we've been operating in Germany for quite some time.

Speaker #3: It's our largest market in continental Europe. And there has been a fair bit of sort of litigation in Germany, litigation and consideration in the civil courts of just exactly how litigation finance and group claims are going to work.

Chris Bogart: It's our largest market in continental Europe. There has been a fair bit of litigation in Germany, litigation and consideration in the civil courts, of just exactly how litigation finance and group claims are going to work. Germany is not the fastest place in the world in terms of making things through the court process and getting to decisions.

Speaker #3: And Germany is not the fastest place in the world in terms of making things through the court process and getting to decisions. And so we're delighted that after some years of litigation, the German Supreme Court, which is the highest court in Germany, released a decision resolving in bring a series of cases using what is called there the assignment model which opens the door to cases that are already on file and already have been percolated there with damages claims of more than half a billion dollars and giving us a really valuable future precedent.

Chris Bogart: Germany is not the fastest place in the world in terms of making things through the court process and getting to decisions. We're delighted that after some years of litigation, the German Supreme Court, which is the highest court in Germany, released a decision resolving in our favor the ability to bring a series of cases using what is called there the assignment model, which opens the door to cases that are already on file and already have been percolated there with damages claims of more than half a billion dollars and giving us a really valuable future precedent. Back in the US, as many of you know, we have a number of portfolios with large law firms.

Chris Bogart: We're delighted that after some years of litigation, the German Supreme Court, which is the highest court in Germany, released a decision resolving in our favor the ability to bring a series of cases using what is called there the assignment model, which opens the door to cases that are already on file and already have been percolated there with damages claims of more than half a billion dollars and giving us a really valuable future precedent. Back in the US, as many of you know, we have a number of portfolios with large law firms.

Speaker #3: And then back in the US, we have as many of you know, we have a number of portfolios with large law firms. We've had one that has had quite a bit of activity this year and not only has it had cash activity, but we've had better-than-expected outcomes as we've been going through that portfolio.

Chris Bogart: We've had one that has had quite a bit of activity this year, and not only has it had cash activity, but we've had better than expected outcomes as we've been going through that portfolio. This didn't even make the slide, but just yesterday, and this has been covered in the press today, you'll see it on Bloomberg and on Reuters. The English CAT, the Competition Appeal Tribunal, certified a $5 billion claim, a £5 billion claim, I should say, against Google on behalf of UK businesses that were overcharged for their search advertising. It's been publicly disclosed that we're funding that claim on a multiple basis. That will take some time now to go through the rest of the process, but that's a major step forward in that case, and you'll see news about it in the press.

Speaker #3: And then this didn't even make the slide, but just yesterday, and this has been covered in the press today, you'll see it on Bloomberg and on Reuters, the English PAT, the Compensation Appeals Tribunal, certified a $5 billion claim a $5 billion pound claim, I should say, against Google on behalf of UK businesses that were overcharged for their search advertising.

Speaker #3: It's been publicly disclosed that we're funding that claim on a multiple basis. And so that's a that will take some time now to go through the rest of the process, but that's a major step forward in that case and you'll see news of better than the press.

Chris Bogart: It's been publicly disclosed that we're funding that claim on a multiple basis. That will take some time now to go through the rest of the process, but that's a major step forward in that case, and you'll see news about it in the press. I'm not highlighting these to say that these are the only things that have happened in the portfolio. They're not. The portfolio remains active and active in both directions. As ever, we have successes, and we have disappointments. Happily, the successes continue to outnumber the disappointments considerably.

Speaker #3: I'm not highlighting these to say that these are the only things that have happened in the portfolio. They're not. The portfolio remains active. And active in both directions.

Chris Bogart: I'm not highlighting these to say that these are the only things that have happened in the portfolio. They're not. The portfolio remains active and active in both directions. As ever, we have successes, and we have disappointments. Happily, the successes continue to outnumber the disappointments considerably. The core point from all of this is to show that we have a big, diversified portfolio of litigations that is in active operation in court systems all over the world. That portfolio is diversified. It's hundreds of cases, not just a few large cases. If you turn to slide 10, you'll see an example, you'll see some data about that diversification.

Speaker #3: As ever, we have successes and we have disappointments. But happily, the successes continue to outnumber the disappointments considerably. The core point from all of this is to show that we have a big diversified portfolio of litigation.

Chris Bogart: The core point from all of this is to show that we have a big, diversified portfolio of litigations that is in active operation in court systems all over the world. That portfolio is diversified. It's hundreds of cases, not just a few large cases. If you turn to slide 10, you'll see an example, you'll see some data about that diversification. What we've done here, I don't think that we've done this before, but if you look at the graphic on the right, we have taken our modeled realization numbers that you've seen in the past, we've segmented them effectively by size.

Speaker #3: That is an active operation in court systems all over the world. And that portfolio is diversified. It's hundreds of cases, not just a few large cases.

Speaker #3: And if you turn to slide 10, you'll see an example you'll see some data about that diversification. So what we've done here and I don't think that we've done this before but if you look at the graphic on the right, we have taken our modeled realization numbers that you've seen in the past and we've segmented them effectively by size.

Chris Bogart: What we've done here, I don't think that we've done this before, but if you look at the graphic on the right, we have taken our modeled realization numbers that you've seen in the past, we've segmented them effectively by size. What you can see there is that we're not dependent on any one big asset. Instead, we've built this rather remarkable global portfolio that has many different things moving through the process, many of those can be significant contributors to cash and liquidity here. It's just somewhat vexing that in addition to the usual unpredictability of litigation timing, we have had a somewhat slower than average approach to this. That level of diversification that you can see in the graphic, I think, is really very compelling.

Speaker #3: And what you can see there is that we're not dependent on any one big asset. That instead, we've built this rather remarkable global portfolio that has many different things moving through the process and many of those can be significant contributors to cash and liquidity here.

Chris Bogart: What you can see there is that we're not dependent on any one big asset. Instead, we've built this rather remarkable global portfolio that has many different things moving through the process, many of those can be significant contributors to cash and liquidity here. It's just somewhat vexing that in addition to the usual unpredictability of litigation timing, we have had a somewhat slower than average approach to this. That level of diversification that you can see in the graphic, I think, is really very compelling.

Speaker #3: It's just somewhat vexing that in addition to the usual unpredictability of litigation timing, that we have had a somewhat slower-than-average approach to this. But that level of diversification that you can see in the graphic, I think, is really very compelling.

Speaker #3: Now, when people see that modeled number there in the middle of that circle, the 110% ROIC, and then they see the actual 82% performance that we've generated historically, they reasonably ask about that disconnect.

Chris Bogart: Now, when people see that modeled number there in the middle of that circle, the 110% ROIC, then they see the actual 82% performance that we've generated historically, they reasonably ask about that disconnect. If you turn to slide 11, we've done a little snippet of analysis that goes beyond the basic historical data that we have historically shown you. Because the reality is, one number does not tell the story in this business. We thought we would dive a little bit deeper to show you why we remain optimistic about this portfolio and its future performance. This is just one component of what's in there. What you can see there, if you look at the chart on the left and the graphic on the right, is that very large deals tend to produce lower returns on invested capital, lower ROICs.

Speaker #3: And if you turn to slide 11, we've done a little snippet of analysis that goes beyond the basic historical data that we have historically shown you.

Speaker #3: Because the reality is one number does not tell the story in this business. And so we thought we would dive a little bit deeper to show you why we remain optimistic about this portfolio and its future performance.

Speaker #3: So this is just one component of what's in there. But what you can see there if you look at the chart on the left, and the graphic on the right, is that very large deals tend to produce lower returns on invested capital, lower ROICs.

Chris Bogart: What you can see there, if you look at the chart on the left and the graphic on the right, is that very large deals tend to produce lower returns on invested capital, lower ROICs. That's not surprising, because we price to risk, we're generally unwilling to put massive amounts of capital to work in very high-risk cases. We're just not enthusiastic, quite obviously, about putting $200 million out the door and losing it in a binary risk case.

Speaker #3: And that's not surprising. Because we price to risk and we're generally unwilling to put massive amounts of capital to work in very high-risk cases.

Chris Bogart: That's not surprising, because we price to risk, we're generally unwilling to put massive amounts of capital to work in very high-risk cases. We're just not enthusiastic, quite obviously, about putting $200 million out the door and losing it in a binary risk case. When we do big cases like that, while they may well produce nice nominal cash profits and strong IRRs, they do have a tendency to bring down our aggregate ROICs, because their ROICs are a little bit lower than our sort of historical averages, they're quite large in the computation. If you just take these six assets alone out of the historical ROIC computation, it goes from 82% to 99%.

Speaker #3: We're just not enthusiastic, quite obviously, about putting a couple hundred million dollars out the door and losing it in a binary risk case. And so when we do big cases like that, while they may well produce nice nominal cash profits and strong IRRs, they do have a tendency to bring down our aggregate ROICs because their ROICs are a little bit lower than our sort of historical averages.

Chris Bogart: When we do big cases like that, while they may well produce nice nominal cash profits and strong IRRs, they do have a tendency to bring down our aggregate ROICs, because their ROICs are a little bit lower than our sort of historical averages, they're quite large in the computation. If you just take these six assets alone out of the historical ROIC computation, it goes from 82% to 99%.

Speaker #3: And they're quite large in the computation. So if you just take these six assets alone, out of the historical ROIC computation, it goes from 82% to 99%.

Speaker #3: So you can't just, I think, look at the one historical number representing 17 years of history. And you do have to look at the size of cases a whole bunch of dynamics.

Chris Bogart: You can't just, I think, look at the one historical number representing 17 years of history, you do have to look at the size of cases, a whole bunch of dynamics. As many of you know, we provide extraordinarily detailed data about the portfolio in our website table, that's where we get these kinds of insights. Now, when we're talking about these large and somewhat lower returning deals, while we remain very committed to growth in this business, I will say that one thing that we have done in response to the YPF events earlier this year and the market feedback around liquidity, is we have somewhat reduced our willingness to do some of these very large but only moderately profitable deals, just with an eye to balancing growth on the one hand, and liquidity and de-leveraging on the other.

Speaker #3: As many of you know, we provide extraordinarily detailed data about the portfolio in our website table. And that's where we get these kinds of insights.

Speaker #3: Now, when we're talking about these large and somewhat lower-returning deals, while we remain very committed to growth in this business, I will say that one thing that we have done in response to the YPF events earlier this year and the market feedback around liquidity is we have somewhat reduced our willingness to do some of these very large but only moderately profitable deals.

Chris Bogart: Now, when we're talking about these large and somewhat lower returning deals, while we remain very committed to growth in this business, I will say that one thing that we have done in response to the YPF events earlier this year and the market feedback around liquidity, is we have somewhat reduced our willingness to do some of these very large but only moderately profitable deals, just with an eye to balancing growth on the one hand, and liquidity and de-leveraging on the other.

Speaker #3: Just with an eye to balancing growth on the one hand and liquidity and deleveraging on the other. Turning to slide 12, this is our usual slide about new business.

Chris Bogart: Turning to slide 12, this is our usual slide about new business. You can see some of the impact of what I've just described on the mix of new business. If you just look at the headline commitment number, which as I've said before, is not the number that we look at internally, but that number is below the 2025 run rate. You have to look at the mix here. If you look at the red bar, which is presumably the most profitable thing that we do. The red bar there has well more than doubled, while the blue bar went down very significantly. If you were to look at our internal metrics, you would not see a decline of the visual kind that you see on the right-hand top side of this graphic, because the relative profitability of those bars is significantly different.

Speaker #3: And you can see some of the impact of what I've just described on the mix of new business. So if you just look at the headline commitment number, which, as I've said before, is not the number that we look at internally, but that number is below the 2025 run rate.

Speaker #3: But you have to look at the mix here. And if you look at the red bar, which is presumably the most profitable thing that we do, in the red bar there has well more than doubled.

Chris Bogart: The red bar there has well more than doubled, while the blue bar went down very significantly. If you were to look at our internal metrics, you would not see a decline of the visual kind that you see on the right-hand top side of this graphic, because the relative profitability of those bars is significantly different.

Speaker #3: While the blue bar went down very significantly. So if you were to look at our internal metrics, you would not see a decline of the visual kind that you see on the right-hand top side of this graphic.

Speaker #3: Because the relative profitability of those bars is significantly different. And so, as you can see there, we've well more than doubled the size of the red bar, while significantly reducing the size of the blue bar.

Chris Bogart: As you can see there, we've well more than doubled the size of the red bar while significantly reducing the size of the blue bar. That's consistent with what I was just describing before. Also probably, I would say, a little bit of firm stasis for a little while after the YPF decision. John is going to chime in now and have a little bit more commentary about the portfolio.

Speaker #3: So that's consistent with what I was just describing before. And also probably, I would say, a little bit of firm stasis for a little while after the YPF decision.

Speaker #3: And John is going to chime in now and have a little bit more commentary about the portfolio.

Speaker #2: Thanks, Chris, and thanks to you all for joining. I'll be brief. I really just want to hit two of the themes that Chris introduced and flesh out what they mean from my perspective for the state of the portfolio.

Jonathan Molot: Thanks, Chris, and thanks to you all for joining. I'll be brief. I really just want to hit two of the themes that Chris introduced and flesh out what they mean from my perspective for the state of the portfolio and the state of the new business machine. As Chris said, he highlighted a few successes we've had in July with a jury verdict, an arbitration win, a German Supreme Court ruling, and another law firm portfolio, and then yesterday, a UK ruling. Those are just examples of things that we're seeing a lot of activity in the portfolio. Looking historically, would people rather that cash had come more quickly and there hadn't been delays? Certainly that's the case. When I look at the portfolio today and see what it's poised to deliver in the future, it really is active and a lot of stuff is happening.

Speaker #2: And the state of the new business machine. As Chris said, he highlighted a few successes we've had in July, with a jury verdict and arbitration win, the German Supreme Court portfolio.

Speaker #2: And then yesterday, a UK ruling. Those are just examples of things that we're seeing a lot of activity in the portfolio. And so looking historically would people rather that cash should come more quickly and there hadn't been delays?

Jonathan Molot: Looking historically, would people rather that cash had come more quickly and there hadn't been delays? Certainly that's the case. When I look at the portfolio today and see what it's poised to deliver in the future, it really is active and a lot of stuff is happening. As Chris said, there can be negative as well as positive developments, the positive ones continue to outweigh the negative quite significantly. The underwriting teams and the case management teams are just very busy with all the developments, many of which are quite positive.

Speaker #2: Certainly, that's the case. But when I look at the portfolio today and see what it's poised to deliver in the future, it really is active.

Speaker #2: And a lot of stuff is happening. And as Chris said, there can be negative as well as positive developments, but the positive ones continue to outweigh the negative quite significantly.

Jonathan Molot: As Chris said, there can be negative as well as positive developments, the positive ones continue to outweigh the negative quite significantly. The underwriting teams and the case management teams are just very busy with all the developments, many of which are quite positive. I'm pretty bullish on the portfolio, and happy that we're able to share some examples of why there is that sentiment. The second thing is on the new business machine. Chris mentions that we have been able to put on very attractive, from a risk-reward perspective, new deals over the past quarter, and I want to hammer home why we are positioned to be able to do that. We have developed deep relationships with law firms, with counterparties who continue to bring us their opportunities, where they need financing for litigation portfolios or for individual litigations.

Speaker #2: And the underwriting teams in the case management teams are just very busy with all the developments many of which are quite positive. And so I'm pretty bullish on the portfolio and happy that we're able to share some examples of why there is that sentiment.

Jonathan Molot: I'm pretty bullish on the portfolio, and happy that we're able to share some examples of why there is that sentiment. The second thing is on the new business machine. Chris mentions that we have been able to put on very attractive, from a risk-reward perspective, new deals over the past quarter, and I want to hammer home why we are positioned to be able to do that. We have developed deep relationships with law firms, with counterparties who continue to bring us their opportunities, where they need financing for litigation portfolios or for individual litigations.

Speaker #2: The second thing is on the new business machine. Chris has put on very attractive, from a risk-reward perspective, new deals over the past quarter.

Speaker #2: And I want to hammer home why we are positioned to be able to do that. We have developed deep relationships with law firms, with counterparties who continue to bring us their opportunities where they need financing for litigation portfolios or for individual litigations.

Speaker #2: And having those relationships means we are the go-to provider of finance in a number of markets. As Chris mentioned, we have activity globally across various jurisdictions.

Jonathan Molot: Having those relationships means we are the go-to provider of finance in a number of markets. As Chris mentioned, we have activity globally across various jurisdictions. Having spent the years building up those relationships, that knowhow, and repeat client base, we have the ability to attract and close these deals that, from my perspective, are quite attractive. The team is very busy, both with an active, productive portfolio and with some great new opportunities that we continue to add into the portfolio. On both fronts, I'm very happy with where we are today. With that, I'll pass it back to Chris.

Speaker #2: And having spent the years building up those relationships, that know-how, and repeat client base, we have the ability to attract and close these deals that, from my perspective, are quite attractive.

Speaker #2: So the team is very busy both with an active productive portfolio and with some great new opportunities that we continue to add into the portfolio.

Speaker #2: So on both fronts, I'm very happy with where we are today. And with that, I'll pass it back to Chris.

Speaker #1: Thanks, John. And just to carry on that theme for a second, for those of you who are Financial Times readers, you'll note that one of the top stories in the FT today concerns law firms, law firm structure, and the desire of US law firms many of them to have some sort of more flexible equity capital structure.

Chris Bogart: Thanks, John. Just to carry on that theme for a second. For those of you who are Financial Times readers, you'll note that one of the top stories in the FT today concerns law firms, law firm structure, and the desire of US law firms, many of them, to have some sort of more flexible equity capital structure. This is a theme that has been running for a while, and one of the themes you'll take away from the article is that while there's a strong demand for these kinds of solutions, they're not really appearing in the market quite yet. That we've talked about that in the past, and that's consistent with our experience. The reason I raise the article is because you will note that there is only one legal finance firm mentioned in that article at all, and that's perfect.

Speaker #1: And this is a theme that has been running for a while. And one of the themes you'll take away from the article is that, while there's a strong demand for these kinds of solutions, they're not really appearing in the market quite yet.

Speaker #1: And that we've talked about that in the past, and that's consistent with our experience. But the reason I raised the article is because you will note that there is only one legal finance firm mentioned in that article at all.

Chris Bogart: The reason I raise the article is because you will note that there is only one legal finance firm mentioned in that article at all, and that's perfect. We have reached the point where we are the undisputed market leader, standing head and shoulders above anybody else in the commercial legal finance area. That's why we see the kinds of opportunities that John was just describing.

Speaker #1: And that's Burford. We have reached the point where we are the undisputed market leader standing head and shoulders above anybody else. In the commercial legal finance area.

Chris Bogart: We have reached the point where we are the undisputed market leader, standing head and shoulders above anybody else in the commercial legal finance area. That's why we see the kinds of opportunities that John was just describing. Let's turn to slide 13. We regularly get the question about older investments. The question basically is, what's going on with these? Are these ever going to produce anything, or are these just sort of dead in the water, waiting for ultimately them to become and killed off? We thought we'd do a little analysis for you to show why that's just absolutely not the case. What this graphic does is it, on the black bar on the left-hand side, shows you the state of the portfolio in terms of deployed cost at the end of 2022 as to pre-pandemic vintages.

Speaker #1: And that's why we see the kinds of opportunities that John was just describing. Let's turn to slide 13. We regularly get the question about older investments.

Chris Bogart: Let's turn to slide 13. We regularly get the question about older investments. The question basically is, what's going on with these? Are these ever going to produce anything, or are these just sort of dead in the water, waiting for ultimately them to become and killed off? We thought we'd do a little analysis for you to show why that's just absolutely not the case. What this graphic does is it, on the black bar on the left-hand side, shows you the state of the portfolio in terms of deployed cost at the end of 2022 as to pre-pandemic vintages.

Speaker #1: And the question basically is, what's going on with these? Are these ever going to produce anything? Or are these just sort of dead in the water waiting for ultimately them to become and killed off?

Speaker #1: And so we thought we'd do a little analysis for you to show why that's just absolutely not the case. So what this graphic does is that on the black bar on the left-hand side, shows you the state of the portfolio in terms of deployed cost at the end of 2022 as to pre-pandemic vintages.

Speaker #1: And at that point, we had almost a billion dollars deployed in those vintages. And since then, a lot has happened, as you can see.

Chris Bogart: At that point, we had almost $1 billion deployed in those vintages. Since then, a lot has happened, as you can see. We've continued to put money into these cases, more than a quarter billion dollars more. We've taken out close to $1 billion in realizations. This is all in this middle three-and-a-half-year period. We still have a fair bit of deployed capital to go. We think that those cases, that portfolio, that portion of the portfolio, is still very strong and is continuing to produce. It's just regrettable that the duration has lengthened because of the systemic delays that we have seen across the court system. We're still a lot faster than the average private equity deal. The reality is, those cases are going to come to an end.

Speaker #1: We've continued to put money into these cases—more than a quarter of a billion dollars more. We've taken out close to a billion dollars in realizations.

Speaker #1: This is all in this middle three and a half year period. And we still have a fair bit of deployed capital to go. So we think that those cases, that portfolio, that portion of the portfolio is still very strong and is continuing to produce.

Speaker #1: It's just regrettable that it's the duration has lengthened because of the systemic delays that we have seen across the court system. But we're still a lot faster than the average private equity deal and the reality is those cases are going to come to an end.

Chris Bogart: We're still a lot faster than the average private equity deal. The reality is, those cases are going to come to an end. They are not at all just sitting there waiting to be put out of their misery. The other thing I would highlight for you, and this is reflected in the last bullet point, but in case it's too cryptic, let me just amplify it. When we do portfolio deals with law firms, we basically sign law firms up to a world where we will then do a series of cases down the road with them. Sometimes those portfolios are in existence when we close the deal, but often they come into existence later.

Speaker #1: They are not at all just sitting there waiting to be put out of their misery. The other thing I would highlight for you, and this is reflected in the last bullet point, but in case it's too cryptic, let me just amplify it.

Chris Bogart: They are not at all just sitting there waiting to be put out of their misery. The other thing I would highlight for you, and this is reflected in the last bullet point, but in case it's too cryptic, let me just amplify it. When we do portfolio deals with law firms, we basically sign law firms up to a world where we will then do a series of cases down the road with them. Sometimes those portfolios are in existence when we close the deal, but often they come into existence later. They're often cross-collateralized in structure.

Speaker #1: When we do portfolio deals with law firms, we basically sign law firms up to a world where we will then do a series of cases down the road with them.

Speaker #1: Sometimes those portfolios are in existence when we close the deal, but often they come into existence later. And they're often cross-lateralized in structure. So what that means is that if we have signed a portfolio deal with a law firm in, let's say, 2019, and that law firm came along in 2023 with a further case to put into that portfolio, that 2023 case is going to show up as part of the 2019 vintage.

Chris Bogart: They're often cross-collateralized in structure. What that means is that if we have signed a portfolio deal with a law firm in, let's say, 2019, and that law firm came along in 2023 with a further case to put into that portfolio, that 2023 case is going to show up as part of the 2019 vintage because of the cross-collateralization element of it. It's just not the case that these are sort of old and cold assets, which is what some people occasionally ask us about. We're very bullish on all components of this portfolio.

Chris Bogart: What that means is that if we have signed a portfolio deal with a law firm in, let's say, 2019, and that law firm came along in 2023 with a further case to put into that portfolio, that 2023 case is going to show up as part of the 2019 vintage because of the cross-collateralization element of it. It's just not the case that these are sort of old and cold assets, which is what some people occasionally ask us about. We're very bullish on all components of this portfolio. Let me switch gears on slide 14 and talk a little bit about liquidity and the balance sheet. I'm going to start with the statistics on the left-hand side. The basic message here is that we are very comfortable with our liquidity and with the ability of the portfolio to generate robust levels of cash.

Speaker #1: Because of the cross-lateralization element of it. And so it's just not the case that these are sort of old and cold assets, which is what some people occasionally ask us about.

Speaker #1: We're very bullish on all components of this portfolio. So let me switch gears on slide 14 and talk a little bit about liquidity and the balance sheet.

Chris Bogart: Let me switch gears on slide 14 and talk a little bit about liquidity and the balance sheet. I'm going to start with the statistics on the left-hand side. The basic message here is that we are very comfortable with our liquidity and with the ability of the portfolio to generate robust levels of cash. We're sitting with $733 million in the bank. We have only $400 million of debt due within the next almost four years. We could theoretically just turn around and pay that debt off tomorrow if we chose to do that.

Speaker #1: And I'm going to start with the statistics on the left-hand side. The basic message here is that we are very comfortable with our liquidity and with the ability of the portfolio to generate robust levels of cash.

Speaker #1: We're sitting with 733 million dollars in the bank. We have only 400 million dollars of debt due within the next almost four years. So we could theoretically just turn around and pay that debt off tomorrow if we chose to do that.

Chris Bogart: We're sitting with $733 million in the bank. We have only $400 million of debt due within the next almost four years. We could theoretically just turn around and pay that debt off tomorrow if we chose to do that. If you think about this in terms of coverage, and again, this reflects my focus on cash and not on arcane GAAP balance sheet metrics. We have a significant amount of what I think of as asset coverage for that debt. We're anticipating a significant flow of cash realizations from our portfolio, and that number that you see there does not include anything from YPF.

Speaker #1: We have, if you think about this in terms of coverage, and again, this reflects my focus on cash and not on arcane gap balance sheet metrics.

Chris Bogart: If you think about this in terms of coverage, and again, this reflects my focus on cash and not on arcane GAAP balance sheet metrics. We have a significant amount of what I think of as asset coverage for that debt. We're anticipating a significant flow of cash realizations from our portfolio, and that number that you see there does not include anything from YPF.

Speaker #1: We have a significant amount of what I think of as asset coverage for that debt. We're anticipating a significant flow of cash realizations from our portfolio.

Speaker #1: And that number that you see there does not include anything from YPF. So we are covered if you want to think of it in those terms 2.3 times.

Chris Bogart: We are covered, if you want to think of it in those terms, 2.3 times on the existing debt, and we're pretty comfortable with that state of affairs, especially when you consider the level of cash that the portfolio generates, even in years that we have found to be somewhat annoyingly slow. When you talk about slowness, you see those bars at the bottom. Slowness, I suppose, is all relative. On the one hand, this represents a not insignificant increase in the average duration of our matters. On the other hand, it's still pretty fast compared to lots of asset classes out there. It's just that you and we have been accustomed to things being faster still. My conclusion from all of those data points is that we're pretty happy with where we are.

Speaker #1: On the existing debt. And we're pretty comfortable with that state of affairs, especially when you consider the level of cash that the portfolio generates even in years that we have found to be somewhat annoyingly slow.

Speaker #1: And when you talk about slowness, you see those bars at the bottom. Slowness, I suppose, is all relative. On the one hand, this represents a not insignificant increase in the average duration of our matters.

Speaker #1: On the other hand, it's still pretty fast compared to lots of asset classes out there. It's just that you and we have been accustomed to things being faster still.

Chris Bogart: On the other hand, it's still pretty fast compared to lots of asset classes out there. It's just that you and we have been accustomed to things being faster still. My conclusion from all of those data points is that we're pretty happy with where we are. That being said, we are certainly aware that the YPF decision was a shock. It was a shock to us inside the business, and it was a shock to the market. We're aware that that has resulted in market anxiety. It's not an ideal time for the portfolio to be moving somewhat more slowly than one would wish, when at the same time we have somewhat more leverage than we might wish.

Speaker #1: So my conclusion from all of those data points is that we're pretty happy with where we are. That being said, we are certainly aware that the YPF decision was a shock.

Chris Bogart: That being said, we are certainly aware that the YPF decision was a shock. It was a shock to us inside the business, and it was a shock to the market. We're aware that that has resulted in market anxiety. It's not an ideal time for the portfolio to be moving somewhat more slowly than one would wish, when at the same time we have somewhat more leverage than we might wish. Even if we disagree with the level of appropriate anxiety over that, the fact that it exists comes with real-world consequences for us. For example, the implied yields today from trading in our long-dated debt are higher than we would wish to see and that we think are actually appropriate for the level of risk associated with that debt. Nevertheless, we are creatures of the market, and we're responsive to what the market thinks.

Speaker #1: It was a shock to us inside the business, and it was a shock to the market. We're aware that that has resulted in market anxiety.

Speaker #1: And it's not an ideal time for the portfolio to be moving somewhat more slowly than one would wish, when at the same time we have somewhat more leverage than we might wish.

Speaker #1: And so even if we disagree with the level of appropriate anxiety over that, the fact that it exists comes with real-world consequences for us.

Chris Bogart: Even if we disagree with the level of appropriate anxiety over that, the fact that it exists comes with real-world consequences for us. For example, the implied yields today from trading in our long-dated debt are higher than we would wish to see and that we think are actually appropriate for the level of risk associated with that debt. Nevertheless, we are creatures of the market, and we're responsive to what the market thinks.

Speaker #1: For example, the implied yields today from trading in our long-dated debt are higher than we would wish to see and that we think are actually appropriate for the level of risk associated with that debt.

Speaker #1: But nevertheless, we are creatures of the market, and we're responsive to what the market thinks. And so that means it is prudent for us to do a bunch of things to husband cash, to focus on our operating expenses and our cash outlays, and to drive a deleveraging program that will sit alongside our growth.

Chris Bogart: That means it is prudent for us to do a bunch of things to husband cash, to focus on our operating expenses and our cash outlays, and to drive a de-leveraging program that will sit alongside our growth. We've shown here on the right a couple of things that we've done in terms of reducing operating expenses, husbanding cash, and those continue to be priorities for us inside the business when set against the very comfortable level of liquidity that we think we have. We're pleased with where we sit, but no one should be under any misapprehension that this is not central to the management team's focus every single day, the balance sheet and our liquidity and what we're doing about that. Let me sum up on slide 15 before turning you over to Jordan.

Speaker #1: So we've shown here on the right a couple of things that we've done in terms of reducing operating expenses, husbanding cash, and those continue to be priorities for us inside the business when set against the very comfortable level of liquidity that we think we have.

Speaker #1: So we're pleased with where we sit, but no one should be under any misapprehension that this is not central to the management team's focus every single day.

Chris Bogart: We're pleased with where we sit, but no one should be under any misapprehension that this is not central to the management team's focus every single day, the balance sheet and our liquidity and what we're doing about that. Let me sum up on slide 15 before turning you over to Jordan. As I said at the outset, we've been doing this for 17 years. We've developed, I think, a demonstrable and enviable track record, both of performance and of leadership and innovation in this industry.

Speaker #1: The balance sheet and our liquidity and what we're doing about that. Let me sum up on slide 15 before turning you over to Jordan.

Speaker #1: So as I said at the outset, we've been doing this for 17 years. We've developed, I think, a demonstrable and enviable track record, both of performance and of leadership and innovation in this industry.

Chris Bogart: As I said at the outset, we've been doing this for 17 years. We've developed, I think, a demonstrable and enviable track record, both of performance and of leadership and innovation in this industry. We've got a very large, well-diversified portfolio that under any reasonable set of circumstances is going to produce a very significant amount of cash going forward. We've already produced almost $4 billion of cash out of that portfolio, and we've done so with a high degree of performance and with stable and desirable loss rates. We have demand for our capital and an origination platform just all over the world, which continues to be driven by the fact that law firms are getting away with enormous increases in their pricing to clients, which is just a call to arms for people to pick up the phone and call us.

Speaker #1: We've got a very large well-diversified portfolio that under any reasonable set of circumstances is going to produce a very significant amount of cash going forward.

Chris Bogart: We've got a very large, well-diversified portfolio that under any reasonable set of circumstances is going to produce a very significant amount of cash going forward. We've already produced almost $4 billion of cash out of that portfolio, and we've done so with a high degree of performance and with stable and desirable loss rates.

Speaker #1: We've already produced almost $4 billion of cash out of that portfolio. And we've done so with a high degree of performance and with stable and desirable loss rates.

Speaker #1: And we have demand for our capital and an origination platform just all over the world, which continues to be driven by the fact that law firms are getting away with enormous increases in their pricing to clients, which is just a call to arms for people to pick up the phone and call us.

Chris Bogart: We have demand for our capital and an origination platform just all over the world, which continues to be driven by the fact that law firms are getting away with enormous increases in their pricing to clients, which is just a call to arms for people to pick up the phone and call us. With that, we appreciate your interest in the business and your forbearance, Jordan will take you through some numbers, then we'll take some questions.

Speaker #1: So with that, we appreciate your interest in the business and your forbearance. And Jordan will take you through some numbers, and then we'll take some questions.

Chris Bogart: With that, we appreciate your interest in the business and your forbearance, Jordan will take you through some numbers, then we'll take some questions.

Speaker #2: Thanks, Chris. And thanks, John. I'm going to jump to slide 17. And walk through some of the high-level metrics I know Chris talked a lot about the quarter, but we'll still go into a little bit more depth with respect to the principal finance and asset management segments.

Jordan Licht: Thanks, Chris, and thanks, John. I'm going to jump to slide 17 and walk through some of the high-level metrics. I know Chris talked a lot about the quarter, we'll still go into a little bit of more depth with respect to the principal finance and asset management segments. Overall, on page 17, you can see the summary. We had a break-even quarter, just slightly profitable. It's important to note not to try and compare the year-to-dates between this year and last year, obviously, given the impact of YPF in Q1. We're going to focus a little bit more on the Q2 results directly as the comparative. You can see on the net realized gains, beating last year same time. Same with asset management income. Chris talked about new business.

Speaker #2: But overall, on page 17, you can see the summary we had a break-even quarter, just slightly profitable. It's important to note not to try and compare the year-to-date between this year and last year.

Speaker #2: Obviously, given the impact of YPF in the first quarter. So we're going to focus a little bit more on the second quarter results directly as the comparative.

Speaker #2: You can see on the net realized gains, beating last year same time, same with asset management income. Chris talked about new business, deployments remain steady on the existing book.

Jordan Licht: You can see on the net realized gains, beating last year same time. Same with asset management income. Chris talked about new business. Deployments remain steady on the existing book. Our realizations were $94 million compared to $62 million in the same period last year. On the right-hand side, just hitting again on liquidity is strong at $733 million. You can see our debt ratios. I'm going to jump straight to page 22 and talk a little bit deeper about the portfolio. This page has had a slight different makeup in terms of how we used to show it.

Jordan Licht: Deployments remain steady on the existing book. Our realizations were $94 million compared to $62 million in the same period last year. On the right-hand side, just hitting again on liquidity is strong at $733 million. You can see our debt ratios. I'm going to jump straight to page 22 and talk a little bit deeper about the portfolio. This page has had a slight different makeup in terms of how we used to show it. This is now in its totality. It includes YPF when you look at the total portfolio of about $4.1 billion. The way we break that down is the fair value of the portfolio that you see on the balance sheet and then our undrawn commitments. Recall our undrawn commitments are split into two, both definitive and discretionary.

Speaker #2: And our realizations were $94 million compared to $62 million in the same period last year. On the right-hand side, just hitting again on liquidity is strong at $733 million.

Speaker #2: And then you can see our debt ratios. I'm going to jump straight to page 22 and talk a little bit deeper about the portfolio.

Speaker #2: This page has had a slight different makeup in terms of how we used to show it. This is now in its totality. It includes YPF.

Jordan Licht: This is now in its totality. It includes YPF when you look at the total portfolio of about $4.1 billion. The way we break that down is the fair value of the portfolio that you see on the balance sheet and then our undrawn commitments. Recall our undrawn commitments are split into two, both definitive and discretionary. Discretionary is similar to the way Chris actually described portfolios in the sense that while we've entered into a partnership with a law firm or a corporate client, there's no obligation to take on the next case if the underwriting proves that it's not worthy.

Speaker #2: When you look at the total portfolio, of about $4.1 billion, the way we break that down is the fair value of the portfolio that you see on the balance sheet and then our undrawn commitments.

Speaker #2: Recall our undrawn commitments are split into two, both definitive and discretionary. Discretionary is similar to the way Chris actually described portfolios. In the sense that while we've entered into a partnership with a law firm, or a corporate client, there's no obligation to take on the next case.

Jordan Licht: Discretionary is similar to the way Chris actually described portfolios in the sense that while we've entered into a partnership with a law firm or a corporate client, there's no obligation to take on the next case if the underwriting proves that it's not worthy. Discretionary is allocated specific to the cases that we've already financed. Taking that fair value, though, breaking it down, you can see our deployed cost of $1.9 billion and then $400-ish million of unrealized gain. That's about a 22% markup, so to speak, on the deployed cost, and that is quite favorable when you think about future earnings power and you compare that to the potential modeled realizations or our historical ROIC. There's plenty of room for incremental revenue to come through as we see milestones and ultimate conclusions.

Speaker #2: If the underwriting proves that it's not worthy, whereas discretionary is allocated specific to the cases that we've already financed. Taking that fair value, though, and breaking it down, you can see our deployed cost of $1.9 billion and then $400-ish million of unrealized gain.

Jordan Licht: Discretionary is allocated specific to the cases that we've already financed. Taking that fair value, though, breaking it down, you can see our deployed cost of $1.9 billion and then $400-ish million of unrealized gain. That's about a 22% markup, so to speak, on the deployed cost, and that is quite favorable when you think about future earnings power and you compare that to the potential modeled realizations or our historical ROIC. There's plenty of room for incremental revenue to come through as we see milestones and ultimate conclusions.

Speaker #2: That's about a 22% markup, so to speak, on the deployed cost. And that is quite favorable when you think about future earnings power, and you compare that to the potential modeled realizations or our historical ROIC—there's plenty of room for incremental revenue to come through as we see milestones and ultimate conclusions.

Speaker #2: The right-hand side is a similar graphic to what you've seen before, which is just the breakdown of the geography as well as the asset type.

Jordan Licht: The right-hand side is a similar graphic to what you've seen before, which is just the breakdown of the geography as well as the asset type. It just goes to show the breadth of the portfolio pairs neatly to the comments Chris had made when showing the modeled realizations and the diversification that we have there. The portfolio is quite large and diverse by a lot of different metrics that you review. Flipping to page 23, this is the breakdown of how the balance sheet asset moved in the quarter. The income statement up above, I'm going to focus though first on just the left-hand side, which marches the asset forward. You can see deployments pretty much offsetting realizations within the book and moving the asset balance. You have three other items that we historically talk about. First, there's the passage of time.

Speaker #2: And it just goes to show the breadth of the portfolio in pairs neatly to the comments Chris had made when showing the modeled realizations and the diversification that we have there.

Speaker #2: The portfolio is quite large and diverse by a lot of different metrics that you review. Flipping to page 23, this is the breakdown of how the balance sheet asset moved in the quarter.

Jordan Licht: The income statement up above, I'm going to focus though first on just the left-hand side, which marches the asset forward. You can see deployments pretty much offsetting realizations within the book and moving the asset balance. You have three other items that we historically talk about. First, there's the passage of time. This is the natural movement forward as assets get closer to their ultimate realization, we recognize a portion of value associated with that. The offset to that is changes in discount rates since they're essentially a DCF.

Speaker #2: The income statement up above I'm going to focus, though, first on just the left-hand side, which marches the asset forward. You can see deployments pretty much offsetting realizations.

Speaker #2: Within the book, and moving the asset balance. And then you have three other items that we historically talk about. First, there's the passage of time.

Speaker #2: This is the natural movement forward as assets get closer to their ultimate realization. And we recognize a portion of value associated with that. The offset to that is changes in discount rates since they're essentially a DCF.

Jordan Licht: This is the natural movement forward as assets get closer to their ultimate realization, we recognize a portion of value associated with that. The offset to that is changes in discount rates since they're essentially a DCF. Interest rates for this quarter were pretty benign and limited movement, you didn't see a lot of movement in the asset value. Finally, you have milestones and other model impacts. These are the recognizable events or other changes to models that we see, excuse me, to cases that we see that then is reflected in our models. I think we've covered a lot of the other content in the principal finance section during Chris's remarks, I'm going to jump quickly to the asset management section, page 30. Overall, asset management continues to perform. It produced around $5 million year to date in cash.

Speaker #2: Interest rates for this quarter were pretty benign and limited movement. So you didn't see a lot of movement in the asset value. And then finally, you have milestones and other model impacts.

Jordan Licht: Interest rates for this quarter were pretty benign and limited movement, you didn't see a lot of movement in the asset value. Finally, you have milestones and other model impacts. These are the recognizable events or other changes to models that we see, excuse me, to cases that we see that then is reflected in our models. I think we've covered a lot of the other content in the principal finance section during Chris's remarks, I'm going to jump quickly to the asset management section, page 30. Overall, asset management continues to perform. It produced around $5 million year to date in cash.

Speaker #2: These are the recognizable events or other changes to models that we see excuse me, to cases that we see that then is reflected in our models.

Speaker #2: I think we've covered a lot of the other content in the principal finance section during Chris's remarks. So I'm going to jump quickly to the asset management section, page 30.

Speaker #2: Overall, asset management continues to perform. It produced around $5 million year-to-date in cash. When you compare the asset management income, though, on the left-hand side, let's say we're pretty much right on track with where we were last year, year-to-date.

Jordan Licht: When you compare the asset management income, though, on the left-hand side, I'd say we're pretty much right on track with where we were last year to date. The reason for the difference is, well, one, as we've mentioned, many of our older funds have been running off, I wouldn't expect, as we mentioned before, to continue to see management fees. The big bump in performance fees we saw last year was actually the flip over of the Advantage Fund hitting some hurdles and then the first set of performance fees coming in. That will be a steady intake as that fund continues to perform. You can see, obviously, the parity in the relationship that we have with our partner in the BOF-C fund.

Speaker #2: The reason for the difference is, well, one, as we've mentioned many of our older funds have been running off. And so I wouldn't expect and as we mentioned before, to continue to see management fees and the big bump in performance fees we saw last year was actually the flip over of the advantage fund hitting some hurdles and then the first set of performance fees coming in.

Speaker #2: And then that will be a steady intake as that fund continues to perform. And then you can see, obviously, the parity in the relationship that we have with our partner in the BOFC fund.

Jordan Licht: That will be a steady intake as that fund continues to perform. You can see, obviously, the parity in the relationship that we have with our partner in the BOF-C fund. I'm going to now move to cover some of the other content related to our capital structure and the balance sheet and expenses. On page 32, just real quickly hitting upon cash. The $157 million of cash was the largest in the last 5 quarters and obviously one of the peaks as we continue to generate cash from the portfolio. We still also have a due-from-settlement balance with $122 million outstanding as of the end of the quarter.

Speaker #2: I'm going to now move to cover some of the other content related to our capital structure and the balance sheet and expenses. So on page 32, just real quickly, hitting up on cash.

Jordan Licht: I'm going to now move to cover some of the other content related to our capital structure and the balance sheet and expenses. On page 32, just real quickly hitting upon cash. The $157 million of cash was the largest in the last 5 quarters and obviously one of the peaks as we continue to generate cash from the portfolio. We still also have a due-from-settlement balance with $122 million outstanding as of the end of the quarter. On page 33, to quickly hit expenses, I want to go a little bit deeper into some of the comments that Chris had made. The first is when you compare the year-to-date salaries and benefits, you can see there's a jump in terms of the overall nominal amount.

Speaker #2: The $157 million of cash was the largest in the last five quarters. And obviously, one of the peaks as we continue to generate cash from the portfolio we still also have a due from settlement balance with $122 million outstanding as of the end of the quarter.

Speaker #2: On page 33, to quickly hit expenses, I want to go a little bit deeper into some of the comments that Chris had made. The first is when you compare the year-to-date salaries and benefits and you can see there's a jump in terms of the overall nominal amount.

Jordan Licht: On page 33, to quickly hit expenses, I want to go a little bit deeper into some of the comments that Chris had made. The first is when you compare the year-to-date salaries and benefits, you can see there's a jump in terms of the overall nominal amount. What that reflects predominantly is the fact that We actually did a bit of cost-cutting and some changes associated with senior and middle management that captures approximately $10 million of annualized compensation expense, that's across salaries, cash bonuses, stock, et cetera.

Speaker #2: What that reflects predominantly is the fact that we actually did a bit of cost-cutting and some changes associated with senior and middle management that captures approximately $10 million of annualized compensation expense.

Jordan Licht: What that reflects predominantly is the fact that We actually did a bit of cost-cutting and some changes associated with senior and middle management that captures approximately $10 million of annualized compensation expense, that's across salaries, cash bonuses, stock, et cetera. The one-time impact of that shows up in a variety of different places. About $5 million, there's a one-time impact that shows up in salaries and benefits. There's an offset to that in other line items with the reversal of some accruals. The net cost was only about $2 million to achieve that $10 million of annualized compensation expense. The last piece that I want to touch on this page, you can see Well, two pieces. G&A has remained steady. If you look year-over-year, in fact, slightly lower this year compared to last year.

Speaker #2: And that's across salaries, cash bonuses, stock, etc. The one-time impact of that shows up in a variety of different places, about $5 million there's a one-time impact that shows up in salaries and benefits.

Jordan Licht: The one-time impact of that shows up in a variety of different places. About $5 million, there's a one-time impact that shows up in salaries and benefits. There's an offset to that in other line items with the reversal of some accruals. The net cost was only about $2 million to achieve that $10 million of annualized compensation expense. The last piece that I want to touch on this page, you can see Well, two pieces. G&A has remained steady. If you look year-over-year, in fact, slightly lower this year compared to last year.

Speaker #2: There's an offset to that in other line items with the reversal of some accruals. So the net cost was only about $2 million, to achieve that $10 million of annualized compensation expense.

Speaker #2: The last piece that I want to touch on on this pieces. G&A has remained steady. If you look year over year, in fact, slightly lower.

Speaker #2: This year compared to last year. And the last piece is the case-related expenditures ineligible for inclusion. What that is, in layman's terms, those are deployments that we no longer believe can be capitalized.

Jordan Licht: The last piece is the case-related expenditures ineligible for inclusion. What that is, in layman's terms, those are deployments that we no longer believe can be capitalized into the asset. That doesn't mean that the case isn't active or healthy. It just doesn't get put into the asset value and unfortunately comes through the income statement. We talked about that briefly last period in which we reversed previous expenses. When you look at that $27, or excuse me, previous deployments, when you look at that $27 million in its totality, $25 million of that actually represents costs that would have been directly associated with funding the active portfolio. Finally, I'm going to finish on page 34, just to hit on a little bit of the debt piece and just reiterate some of Chris's comments. We have ample cash and marketable securities sitting at $733 million.

Speaker #2: Into the asset. That doesn't mean that the case isn't active, or healthy. It just doesn't get put into the asset value. And unfortunately, comes to the income statement.

Speaker #2: We talked about that briefly last period in which we had to take which we reversed previous expenses. So when you look at that $27 or excuse me, previous deployments, when you look at that $27 million, in its totality $25 million of that actually represents costs that would have been directly associated with funding the active portfolio.

Jordan Licht: When you look at that $27, or excuse me, previous deployments, when you look at that $27 million in its totality, $25 million of that actually represents costs that would have been directly associated with funding the active portfolio. Finally, I'm going to finish on page 34, just to hit on a little bit of the debt piece and just reiterate some of Chris's comments. We have ample cash and marketable securities sitting at $733 million. Our leverage ratio is outlined on the right-hand side.

Speaker #2: Finally, I'm going to finish on page 34, just to hit on a little bit of the debt piece and just reiterate some of Chris's comments.

Speaker #2: We have ample cash and marketable securities sitting at $733 million. Our leverage ratios outlined on the right-hand side. And then when you look at the debt outstanding, the weighted average life of the debt is 5.2 years.

Jordan Licht: Our leverage ratio is outlined on the right-hand side. When you look at the debt outstanding, the weighted average life of the debt is 5.2 years, and that compares favorably on a lot of different metrics, whether it's the pace of concluded assets or relative to the pace of active deployments. As Chris and John mentioned, we're excited and still feel confident in the portfolio and its ability to continue to generate a healthy cash flow to manage through the debt load. That concludes our prepared remarks. At this point, I'm going to hand over to the operator and Chris to open up for questions.

Jordan Licht: When you look at the debt outstanding, the weighted average life of the debt is 5.2 years, and that compares favorably on a lot of different metrics, whether it's the pace of concluded assets or relative to the pace of active deployments. As Chris and John mentioned, we're excited and still feel confident in the portfolio and its ability to continue to generate a healthy cash flow to manage through the debt load. That concludes our prepared remarks. At this point, I'm going to hand over to the operator and Chris to open up for questions.

Speaker #2: And that compares favorably on a lot of different metrics, whether it's the pace of concluded assets, or relative to the pace of active deployments.

Speaker #2: And as Chris and John mentioned, we're excited and still feel confident in the portfolio and its ability to continue to generate healthy cash flow to manage through the debt load.

Speaker #2: That concludes our prepared remarks. And at this point, I'm going to hand over to the operator and Chris to open up for questions.

Speaker #1: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again.

Operator 2: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question comes from Timothy D'Agostino with B. Riley Securities. Your line is open.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question comes from Timothy D'Agostino with B. Riley Securities. Your line is open.

Speaker #1: Your first question comes from Timothy D'Agostino with B. Riley Securities. Your line is open.

Speaker #2: Yeah. Thank you for taking the questions this morning. I guess thinking about the updates regarding the portfolio, whether it be the mining arbitration, the US jury verdict, or the German Supreme Court, while these cases are obviously, the timing around it's very hard to kind of tell.

Timothy D'Agostino: Yeah. Thank you for taking the questions this morning. I guess thinking about the updates regarding the portfolio, whether it be the mining arbitration, the US jury verdict, or the German Supreme Court. While these cases are obviously the timing around it's very hard to kind of tell, could you just provide us maybe some color on how you internally think about the timelines of those proceeding forward, just so we can think about it till year-end and as we look towards Q3? Thank you.

Speaker #2: Could you just provide us maybe some color on how you internally think about the timelines of those proceeding forward, just so we can think about it till year-end and as we look towards the third quarter?

Speaker #2: Thank you.

Speaker #3: Yeah. The purpose of giving those kinds of portfolio updates is really to show people that there is momentum in the portfolio. So in other words, to dispel the notion that things are just sort of sitting stagnantly.

Chris Bogart: Yeah. The purpose of giving those kinds of portfolio updates is really to show people that there is momentum in the portfolio. In other words, to dispel the notion that things are just sort of sitting stagnantly. As John talked about as well, they're just not. It's not just those handful of examples, but there is a very significant amount of activity going on across the multi-hundred case book that we have. We're not putting them out there to suggest that those things are the things that will turn into cash between, for example, you said now and the end of the year. Each of those things has some further stages in litigation to go through. The thing that drives settlements and litigation, first of all, are catalysts.

Speaker #3: And as John talked about as well, they're just not. So it's not just those handful of examples, but there is a very significant amount of activity going on across the multi-hundred case book that we have.

Speaker #3: We're not putting them out there to suggest that those things are the things that will turn into cash between for example, you said now at the end of the year.

Speaker #3: Each of those things has some further stages in litigation to go through. But the thing that drives settlements and litigation, first of all, are catalysts.

Chris Bogart: Each of those things has some further stages in litigation to go through. The thing that drives settlements and litigation, first of all, are catalysts. It's certainly reasonable to think that as you get catalysts in matters, that also opens the door to settlement discussions in a way that the absence of a catalyst seldom does. It's not necessarily that we have our eyes on those cases that we talked about as settlement candidates, but rather other cases where there are settlement discussions going on right now because there were prior catalysts.

Speaker #3: And so it's certainly reasonable to think that as you get catalysts in matters, that also opens the door to settlement discussions in a way that the absence of a catalyst seldom does.

Jordan Licht: It's certainly reasonable to think that as you get catalysts in matters, that also opens the door to settlement discussions in a way that the absence of a catalyst seldom does. It's not necessarily that we have our eyes on those cases that we talked about as settlement candidates, but rather other cases where there are settlement discussions going on right now because there were prior catalysts. This whole thing is a continuum from the beginning of a piece of litigation to the end, where there are points along the way that increase the likelihood of resolution. That's what our business is all about. As you'll remember, we're close to 80% of our matters ultimately resolving by settlement instead of by final adjudication. The thing, this is just sort of common sense.

Speaker #3: And it's not necessarily that we have our eyes on those cases, that we talked about, as settlement candidates, but rather other cases where there are settlement discussions going on right now because there were prior catalysts.

Speaker #3: So it's not this whole thing is a continuum. From the beginning of a piece of litigation to the end, where there are points along the way that increase the likelihood of resolution.

Chris Bogart: This whole thing is a continuum from the beginning of a piece of litigation to the end, where there are points along the way that increase the likelihood of resolution. That's what our business is all about. As you'll remember, we're close to 80% of our matters ultimately resolving by settlement instead of by final adjudication. The thing, this is just sort of common sense. If I'm suing you, and I'm looking for a big check from you, the mere fact that I have sued you is not likely to have you reaching for your checkbook in a way that you weren't prepared to just a few weeks before.

Speaker #3: And that's what our business is all about. As you'll remember, close to 80% of our matters ultimately resolve by settlement instead of by final adjudication.

Speaker #3: But the thing if you can this is just sort of common sense. If I'm suing you, and I'm looking for a big check from you, the mere fact that I have sued you is not likely to have you reaching for your checkbook.

Jordan Licht: If I'm suing you, and I'm looking for a big check from you, the mere fact that I have sued you is not likely to have you reaching for your checkbook in a way that you weren't prepared to just a few weeks before.

Speaker #3: In a way that you wouldn't that you weren't prepared to just a few weeks before. So something needs to happen in that lawsuit to make you think that you're a vulnerability is greater than you perceived it to be when you refused to pay me before we commenced litigation.

Chris Bogart: Something needs to happen in that lawsuit to make you think that your vulnerability is greater than you perceived it to be when you refused to pay me before we commenced litigation. That's what so much of this is all about, is using the litigation process to get to those catalysts that ultimately drive the settlements. A jury verdict is a great example of that. It's relatively uncommon for cases where we win a jury verdict to go all the way to the end of the litigation process and appeal and try to go to Supreme Court and then enforce against assets and get paid by enforcement against assets. That's pretty uncommon. It's not never, but it's pretty uncommon. What's more common is that that act, that event, will cause a recalibration of the other side's position, and that will drive an economic outcome.

Speaker #3: And so that's what so much of this is all about: using the litigation process to get to those catalysts that ultimately drive the settlements.

Speaker #3: And so a jury verdict is a great example of that. It's relatively uncommon for cases where we win a jury verdict, to go all the way to the end of the litigation process and appeal and try to go to the Supreme Court, and then enforce against assets and get paid by enforcement against assets.

Chris Bogart: That's pretty uncommon. It's not never, but it's pretty uncommon. What's more common is that that act, that event, will cause a recalibration of the other side's position, and that will drive an economic outcome.

Speaker #3: That's pretty uncommon. It's not never, but it's pretty uncommon. What's more common is that that act, that event, will cause a recalibration of the other side's position.

Speaker #3: And that will drive an economic outcome.

Speaker #2: Okay, great. Thanks so much. And if I could just ask a second question: on the streamlining operating costs noted on the Save to Comp, is that the start of broader cuts?

Timothy D'Agostino: Okay, great. Thank you so much. If I could just ask a second question. On the streamlining operating costs noted on the save to comp, I guess, is that the start of broader cuts? I guess, do you see more potential operating cost savings going forward, whether it be through those senior to mid-management cuts? Or is what we're seeing right now kind of the ceiling of what you plan on doing? Thank you.

Speaker #2: I guess, do you see more potential operating cost savings going forward, whether it be through those senior to mid management cuts, or is where what we're seeing right now kind of the ceiling of what you plan on doing?

Speaker #2: Thank you.

Speaker #3: Yeah. Burford's a pretty lean business. And so it's not as though we have sort of armies of people that like you see all these cuts happening at Google and Meta and so on.

Chris Bogart: Yeah. Burford's a pretty lean business. It's not as though we have armies of people that like you see all these cuts happening at Google and Meta and so on. That's just not the kind of business that we are. We only have somewhere around 160 people right now. No, it's not our intention to engage in sort of serial waves of layoffs. What we did do here on a one-time basis was we encouraged some retirements. We streamlined a few functions and so on. I would say the other thing that we pay careful attention to is the extent to which growth requires hiring. That's a combination of just general operating leverage. It's also a question of our continuing ability to use technology efficiently.

Speaker #3: That's just not the kind of business that we are. We only have somewhere between somewhere around 160 people right now. And so no, it's not our intention to engage in sort of serial waves of layoffs.

Speaker #3: But what we did do here on a one-time basis was, we encouraged some retirements, we streamlined a few functions, and so on. But I would say the other thing that we pay careful attention to is the extent to which growth requires hiring.

Speaker #3: And that's a combination of just general operating leverage and it's also a question of our continuing ability to use technology efficiently. And both of those things enable us to do more with a smaller rate of growth in headcount than might have been the case even just a year or two ago.

Chris Bogart: That's a combination of just general operating leverage. It's also a question of our continuing ability to use technology efficiently. Both of those things enable us to do more with a smaller rate of growth in headcount than might have been the case even just a year or two ago.

Chris Bogart: Both of those things enable us to do more with a smaller rate of growth in headcount than might have been the case even just a year or two ago.

Speaker #2: Okay. Great. Thank you so much for taking the questions this morning. Thank you.

Timothy D'Agostino: Okay, great. Thank you so much for taking the questions this morning.

Operator 2: Your next question.

Operator: Your next question.

Speaker #1: Your next question comes from Henry Coffey with Wedbush Securities. Your line is open.

Chris Bogart: Thank you.

Operator 2: Your next question comes from Henry Coffey with Wedbush Securities. Your line is open.

Operator: Your next question comes from Henry Coffey with Wedbush Securities. Your line is open.

Speaker #2: Good morning. Thank you for taking my question. The when we talk about cash flow a lot, I was looking at and I did this in my head, so if I get some numbers wrong, I apologize.

Henry Coffey: Good morning. Thank you for taking my question. When we talk about cash flow a lot, I was looking at, and I did this in my head, so if I get some numbers wrong, I apologize. It looks like your cash went up significantly, as you pointed out. Your liquid assets went up significantly, as you pointed out. When we look at net debt, it actually went up over the last 6 months by about $100 million. Is that correct? Maybe you could comment on what the more sequential March to June numbers look like.

Speaker #2: It looks like your net your cash went up significantly as you pointed out. Your liquid assets went up significantly as you pointed out. But when we look at net debt, it actually went up over the last six months by about $100 million.

Speaker #2: Is that correct? And maybe you could comment on what the more sequential March to June numbers look like.

Speaker #3: Yeah. Sure. Jordan can certainly chime in there. We did issue debt in January though. So looking at December to June numbers is going to reflect that.

Chris Bogart: Yeah, sure. Jordan can certainly chime in there. We did issue debt in January, though, so looking at December to June numbers-

Henry Coffey: Right

Chris Bogart: is going to reflect that. Jordan?

Speaker #3: Jordan?

Speaker #4: Yeah. No. I mean, I think there was a lot of activity in the June time frame in terms of cleaning up the historical UK issuance and then also doing our issuance in January at that moment in time.

Jordan Licht: Yeah. No, I think there was a lot of activity in the June timeframe in terms of cleaning up the historical UK issuance, then also doing our issuance in January at that moment in time. I think in looking at those numbers, if I recall, I'm doing this by memory, so forgive me as well, Henry, but I think we were around $740 million of cash and marketable securities at the end of Q1. Give or take then $10 million difference when you look quarter-over-quarter. Obviously, our debt balance would've been the same, if you're looking at the end of Q1 versus the end of this quarter.

Speaker #4: And so, I think in looking at those numbers, if I recall—I'm doing this by memory, so forgive me as well, Henry—but I think we're around $740-ish million of cash and marketable securities at the end of the first quarter.

Speaker #4: So, give or take, then, a $10 million difference when you look quarter over quarter. And obviously, then, our debt balance would have been the same if you're looking at the end of the first quarter versus the end of this quarter.

Speaker #2: Okay. So there's more balance there. And then this is a much more general question that we can get into over time. But you talk about the annualized return over time of the portfolio.

Henry Coffey: Okay, there's more balance there. This is a much more general question that we can get into over time. You talk about the annualized return over time of the portfolio. How can we adjust that? I assume that's a gross number based on net realizations. How can we adjust that to account for capital costs, financing costs, and the actual administrative costs and direct costs associated with that very large number?

Speaker #2: How can we adjust that? And I assume that's a gross number. Net based on net realizations. How can we adjust that to account for capital costs, financing costs, and the actual administrative costs and direct costs associated with that very large number?

Speaker #3: Yeah. I think and investors model this according to their own according to their own progress, basically. The challenge obviously with any business like this, especially a business where a significant amount of our cost goes into making an investment decision in the first place.

Chris Bogart: Yeah. Investors model this according to their own prerogatives, basically. The challenge, obviously, with any business like this, especially a business where a significant amount of our cost goes into making an investment decision in the first place. We don't play an active role in these litigation cases once we invest in them. We certainly are engaged in a case management and monitoring role, but we're not litigating the cases. A significant amount of our human resource activity is sifting through the funnel of cases that are coming in the door and deciding which ones to invest in and making those investment decisions. Then there can be relatively long periods where those cases take no staff time at all. What that does is create a fairly significant timing mismatch between the incurrence of OpEx style expenses and the cash resolution.

Speaker #3: So we're not we don't play an active role in these litigation cases once we invest in them. We certainly are engaged in a case management and monitoring role, but we're not litigating the cases.

Speaker #3: And so a significant amount of our human resource activity is sifting through the funnel of cases that are coming in the door and deciding which ones to invest in and making those investment decisions.

Speaker #3: And then there can be relatively long periods where those cases take no staff time at all. So what that does is create a fairly significant timing mismatch between the incurrence of OpEx style expenses and the cash resolution.

Chris Bogart: Then there can be relatively long periods where those cases take no staff time at all. What that does is create a fairly significant timing mismatch between the incurrence of OpEx style expenses and the cash resolution. In a growing business like ours, you can't just look at it on a period-to-period basis. That is the easy response as well to the people who come along and say, "Gee, you don't actually generate that much net profit." You have to sort of assign costs in some methodological way to the back book effectively.

Speaker #3: And so, in a growing business like ours, it's hard—you can't just look at it on a period-to-period basis. And that is the easy response, as well, to the people who come along and say, "Gee, you don't actually generate that much net profit." You have to look at—you have to sort of assign costs in some methodological way to the back book, effectively.

Chris Bogart: In a growing business like ours, you can't just look at it on a period-to-period basis. That is the easy response as well to the people who come along and say, "Gee, you don't actually generate that much net profit." You have to sort of assign costs in some methodological way to the back book effectively. Cost of debt is easier because the cost of debt is public. You can make your own sort of temporal assumptions along the way, influenced by the fact that you can do it pretty accurately because we give you case-by-case resolution data and time to resolution data. I don't know, Jordan, if you want to add anything to that.

Speaker #3: Cost of debt is easier because the cost of debt is public. And you can make your own sort of temporal assumptions along the way influenced by the fact that you can do it pretty accurately because we give you case by case resolution data and time to resolution data.

Chris Bogart: Cost of debt is easier because the cost of debt is public. You can make your own sort of temporal assumptions along the way, influenced by the fact that you can do it pretty accurately because we give you case-by-case resolution data and time to resolution data. I don't know, Jordan, if you want to add anything to that.

Speaker #3: I don't know, Jordan, if you want to add anything to that.

Speaker #4: Yeah. Look, I think the only piece is that if you go to our Investor Day, about a year and a half or two years ago now, we outlined the way in which we think about unit economics.

Jordan Licht: Yeah, look, I think the only piece is that if you go to our investor day about a year and a half or 2 years ago now, we outlined the way in which we think about unit economics. When we're underwriting today, obviously there's a duration associated with the back book in the case that it's taken slightly longer than one would've anticipated. Some of those deals, many of them have protections on the back end in terms of rising multiples or back-end fee arrangements or interest rate components and so forth. Duration has extended. That thought process around duration, though, does go into the underwriting of new cases. We do think about unit economics on a very similar basis on a go-forward basis.

Speaker #4: When we're underwriting today, obviously there's a duration associated with the back book in the case that it's taken slightly longer than one would have anticipated. Some of those deals—many of them—have protections on the back end in terms of rising multiples, or back-end fee arrangements, or interest rate components, and so forth.

Speaker #4: But duration has extended. That thought process around duration, though, does go into the underwriting of new cases. And so we do think about unit economics on a very similar basis.

Jordan Licht: That thought process around duration, though, does go into the underwriting of new cases. We do think about unit economics on a very similar basis on a go-forward basis. That's generally how we think about how to apply the cost of debt and our OpEx into how it flows down into return on equity.

Speaker #4: On a go-forward basis. And so there is that that's generally how we think about how to apply the cost of debt and our OpEx into how it flows down into return on equity.

Jordan Licht: That's generally how we think about how to apply the cost of debt and our OpEx into how it flows down into return on equity.

Speaker #2: All right. Thank you. Thank you very much.

Henry Coffey: All right. Thank you. Thank you very much.

Speaker #3: Sure. Thanks for the question.

Chris Bogart: Sure. Thanks for the question.

Speaker #1: Yeah, I'll jump in here. We do have a question that's come in on the webcast, which I'll pose for the team. Can you confirm that the cost of deployed capital on the pre-pandemic cases means that realizations relating to such have produced little or no net profit?

Josh Wood: Yeah, I'll jump in here. We do have a question that's come in on the webcast, which I'll pose for the team. Can you confirm that the cost of deployed capital on the pre-pandemic cases means that realizations relating to such have produced little or no net profit?

Chris Bogart: No, I think that's not the right way to look at that dynamic at all. If you look at the return profile of those pre-pandemic cases, and you can sort of intuit it from the slide that I had up earlier, and you can go deeper into the data if you so choose. The return profile of those cases is exactly comparable to the overall portfolio return profile. We're not seeing a degradation in ROIC for those cases. We may be seeing a little bit of an IRR degradation, just because of the passage of time, and we've talked about that before. Obviously, when you're generating those kinds of high returns, the associated cost certainly does not eat up all of those returns. Our historic weighted average cost of debt is well down in the single digits.

Speaker #3: No, I don't think that's the right way to look at that dynamic at all. If you look at the return profile of those pre-pandemic cases—and you can sort of intuit it from the slide that I had up earlier, and you can go deeper into the data if you so choose.

Speaker #3: The return profile of those cases is exactly comparable to the overall portfolio return profile. So we're not seeing we're not seeing a degradation in ROEX for those cases.

Speaker #3: We may be seeing a little bit of an IRR degradation, just because of the passage of time. And we've talked about that before. And obviously, when you're generating those kinds of high returns, the associated cost certainly does not eat up all of those returns.

Chris Bogart: Obviously, when you're generating those kinds of high returns, the associated cost certainly does not eat up all of those returns. Our historic weighted average cost of debt is well down in the single digits. I think it's a quiet August morning here in New York. I think that brings us to an end of both the oral and the webcast questions.

Speaker #3: Our historic weighted average cost of debt is well down in the single digits. So I think it's a I think it's a quiet August morning here in New York.

Chris Bogart: I think it's a quiet August morning here in New York. I think that brings us to an end of both the oral and the webcast questions. Thank you everybody for your time and attention today. We'll look forward to reporting to you later this fall on not only the Q3, but on our continued progress with respect to the balance sheet. In the interim, we'd encourage you to be in touch with us if you have any specific or individualized questions that we didn't touch on today. Thanks very much and enjoy the rest of the summer, everybody.

Speaker #3: And I think that brings us to the end of both the oral and webcast questions. So, thank you, everybody, for your time and attention today.

Chris Bogart: Thank you everybody for your time and attention today. We'll look forward to reporting to you later this fall on not only the Q3, but on our continued progress with respect to the balance sheet. In the interim, we'd encourage you to be in touch with us if you have any specific or individualized questions that we didn't touch on today. Thanks very much and enjoy the rest of the summer, everybody.

Speaker #3: We'll look forward to reporting to you later this fall on not only the third quarter, but on our continued progress with respect to the balance sheet.

Speaker #3: And in the interim, we've encouraged you to be in touch with us if you have any specific or individualized questions that we didn't touch on today.

Speaker #3: Thanks very much, and enjoy the rest of the summer, everybody.

Operator 2: This concludes today's conference call and webcast. Thank you for joining. You may now disconnect.

Operator: This concludes today's conference call and webcast. Thank you for joining. You may now disconnect.