Burford Capital Ltd

Previous wording

The following discussion and analysis of the financial condition and results of operations is intended to convey management’s perspective regarding the Group’s operational and financial performance for the three months ended March 31, 2025 and 2024, respectively. It should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and the audited consolidated financial statements and related notes included in the 2024 Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include those identified below and those discussed under “Risk Factors” in the 2024 Form 10-K.

Current wording

The following discussion and analysis of the financial condition and results of operations is intended to convey management’s perspective regarding the Group’s operational and financial performance for the three and six months ended June 30, 2025 and 2024, respectively. It should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and the audited consolidated financial statements and related notes included in the 2024 Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include those identified below and those discussed under “Risk Factors” in the 2024 Form 10-K.

Previous wording

We are a global firm that serves the industry of law by providing an array of financial products and services. Our largest business is providing capital to clients engaged in ongoing legal disputes, which they can use to pay the legal fees and expenses associated with disputes, to monetize the expected future value of disputes or to do both. Our focus is on large, complex disputes, not on small-scale litigation typically pursued by consumers or small businesses.

Current wording

We are the world’s largest dedicated provider of capital, based on portfolio size, against the underlying value of litigation and legal assets, which we colloquially call legal finance. We are a global firm that serves the industry of law by providing an array of financial products and services. Our largest business is providing capital to clients engaged in ongoing legal disputes, which they can use to pay the legal fees and expenses associated with disputes, to monetize the expected future value of disputes or to do both. Our focus is on large, complex disputes, not on small-scale litigation typically pursued by consumers or small businesses.

Previous wording

Our portfolio returns are driven by judicial activity, and we believe these returns are generally uncorrelated to market conditions or the performance of the overall economy. The most direct impact of economic and market conditions on our business relates to our cost of debt and ease of access to corporate debt capital markets, as well as movements in market rates that cause adjustments to the discount rates applied in the fair value of our assets and impact our quarterly revenue recognition in accordance with US GAAP. We believe that we maintain access to corporate debt capital markets, supported by a credit rating from S&P that was upgraded in the third quarter 2024, and a positive rating outlook status from Moody’s as of the date of this Form 10-Q. Overall, we believe our business model is particularly resilient to economic and market cycles due to the nature of the assets that drive our revenues and cash flow.

Current wording

Our portfolio returns are driven by judicial activity, and we believe these returns are generally uncorrelated to market conditions or the performance of the overall economy. The most direct impact of economic and market conditions on our business relates to our cost of debt and ease of access to corporate debt capital markets, as well as movements in market rates that cause adjustments to the discount rates applied in the fair value of our assets and impact our quarterly revenue recognition in accordance with US GAAP. We believe that we maintain access to corporate debt capital markets, supported by credit rating upgrades from Moody’s in the second quarter of 2025 and from S&P in the third quarter of 2024 and as demonstrated by a successful debt offering in July 2025. Overall, we believe our business model is particularly resilient to economic and market cycles due to the nature of the assets that drive our revenues and cash flow.

Previous wording

More broadly, economic conditions can have an impact on the amount and type of litigation that we may consider financing. For example, increased rates of corporate insolvencies can lead to opportunities to finance litigation relating to or arising out of insolvencies and bankruptcies; higher interest rates or other forms of economic stress can cause businesses to act illegally (such as to conspire to fix prices), leading to financeable claims; and pressure from shareholders and markets can lead to the commission of securities fraud and other such acts, again leading to financeable claims.

Current wording

More broadly, economic conditions can have an impact on the amount and type of litigation that we may consider financing. For example, increased rates of corporate insolvencies can lead to opportunities to finance litigation relating to or arising out of insolvencies and bankruptcies; higher interest rates or other forms of economic stress can cause businesses to act illegally (such as to conspire to fix prices) leading to financeable claims; and pressure from shareholders and markets can lead to the commission of securities fraud and other similar acts, again leading to financeable claims.

Previous wording

During the three months ended March 31, 2025, the rising potential for global trade disruption through the implementation of tariffs drove significant volatility in global financial markets. We do not believe that a broad elevation in global tariff rates would have a significant impact on the performance of our legal finance portfolio or our financial results. While the economic impact of trade tariffs is uncertain at this point, tighter financial conditions and a weakening of GDP would typically cause the incidence of corporate disputes and associated litigation to increase, though it is usual for this to occur with a lag.

Current wording

During the three and six months ended June 30, 2025, the rising potential for global trade disruption through the implementation of tariffs drove significant volatility in global financial markets. We do not believe that a broad elevation in global tariff rates would have a significant impact on the performance of our legal finance portfolio or our financial results. While the economic impact of trade tariffs is uncertain at this point, tighter financial conditions and a weakening of gross domestic product would typically cause the incidence of corporate disputes and associated litigation to increase, though it is usual for this to occur with a lag.

Previous wording

Court systems and other forms of adjudication have returned to functionality in the aftermath of the Covid-19 pandemic. In general, court activity has continued to work through the backlog caused by the Covid-19 pandemic and, during the three months ended March 31, 2025, we have observed continuing portfolio activity. Nevertheless, some court systems continue to face backlogs, delaying adjudication. Inevitably, some of our matters (and thus our cash realizations from them) in jurisdictions impacted by court backlogs have been slowed by these dynamics. We are often protected on duration risk, however, as many of our assets have time-based terms that increase our absolute returns as time passes, we consider delays to be deferral of income rather than its permanent diminution. We have not seen the discontinuance of any matters.

Current wording

Court systems and other forms of adjudication have returned to functionality in the aftermath of the Covid-19 pandemic. In general, court activity has continued to work through the backlog caused by the Covid-19 pandemic and, during the three and six months ended June 30, 2025, we have observed continuing portfolio activity. Nevertheless, some court systems continue to face backlogs, delaying adjudication. Inevitably, some of our matters (and thus our cash realizations from them) in jurisdictions impacted by court backlogs have been slowed by these dynamics. We are often protected on duration risk, however, as many of our assets have time-based terms that increase our absolute returns as time passes, we consider delays to be deferral of income rather than its permanent diminution. We have not seen the discontinuance of any matters. Of our concluded matters since June 2021, we have observed a higher incidence of pre-adjudication settlements as a proportion of aggregate realizations in comparison to the period from our inception to June 2021. We do not yet know whether this is an effect of the Covid-19 pandemic or a lasting trend.

Previous wording

To the extent that the claimant in a matter we are financing becomes insolvent, insolvency proceedings typically provide for the continued prosecution of claims given that the claim is a valuable contingent asset, the recovery of which is in the best interests of the claimant’s stakeholders, and we are often a secured creditor with respect to the litigation we are financing. Nevertheless, a claimant’s insolvency may delay the underlying litigation while the insolvency process unfolds. Judgment creditors are typically unsecured creditors, and should the defendant in a matter we are financing becomes insolvent, the risk to our recovery is dependent on the financial condition of the judgment debtor and the availability of assets for unsecured creditors.

Current wording

To the extent that the claimant in a matter we are financing becomes insolvent, insolvency proceedings typically provide for the continued prosecution of claims given that the claim is a valuable contingent asset, the recovery of which is in the best interests of the claimant’s stakeholders, and we are often a secured creditor with respect to the litigation we are financing. Nevertheless, a claimant’s insolvency may delay the underlying litigation while the insolvency process unfolds. Judgment creditors are typically unsecured creditors, and should the defendant in a matter we are financing become insolvent, the risk to our recovery is dependent on the financial condition of the judgment debtor and the availability of assets for unsecured creditors.

Previous wording

We report our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2025, and comparative periods contained in this Form 10-Q in accordance with US GAAP. Our unaudited condensed consolidated financial statements are presented in US dollars.

Current wording

We report our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2025 and comparative periods contained in this Form 10-Q in accordance with US GAAP. Our unaudited condensed consolidated financial statements are presented in US dollars.

Previous wording

Additionally, we believe it is useful to provide a view of Burford as a stand-alone business (i.e., eliminating the impact of these private funds) by furnishing information on a non-GAAP basis that eliminates the effect of this consolidation. We refer to this basis of presentation as “Burford-only”. Our segment reporting, which conveys the performance of our business across two reportable segments – (i) Principal Finance and (ii) Asset Management and Other Services – is presented on a Burford-only basis. We refer to our segment reporting in the aggregate as “Total segments”. Note that we have introduced more prominent segment reporting in our disclosures with the issuance of our 2024 Form 10-K, as we transitioned to reporting as a US domestic issuer. Disclosures labeled as “Total segments (Burford-only)” in this Form 10-Q are synonymous with similar disclosures labeled as “Burford-only” in prior reporting periods.

Current wording

Management and Other Services – is presented on a Burford-only basis. We refer to our segment reporting in the aggregate as “Total segments”. We have introduced more prominent segment reporting in our disclosures in the 2024 Form 10-K, as we transitioned to reporting as a US domestic issuer. Disclosures labeled as “Total segments (Burford-only)” in this Form 10-Q are synonymous with similar disclosures labeled as “Burford-only” in prior reporting periods.

Previous wording

This Form 10-Q presents certain unaudited key performance indicators (“KPIs”). The KPIs are presented because (i) we use them to monitor our financial condition and results of operations and/or (ii) we believe they are useful to investors, securities analysts and other interested parties. The KPIs, as defined by us, may not be comparable to similarly titled measures as presented by other companies due to differences in the way the KPIs are calculated. Even though the KPIs are used to assess our financial condition and results of operations, and these types of measures are commonly used by investors, they have important limitations as analytical tools and should not be considered in isolation from, as substitutes for, or superior to, our unaudited condensed consolidated financial condition or results of operations prepared in accordance with US GAAP. Consistent with how management assesses Burford’s business, we also present certain of these KPIs on both a segment and a group-wide bases.

Current wording

This Form 10-Q presents certain unaudited key performance indicators (“KPIs”). The KPIs are presented because (i) we use them to monitor our financial condition and results of operations and/or (ii) we believe they are useful to investors, securities analysts and other interested parties. The KPIs, as defined by us, may not be comparable to similarly titled measures as presented by other companies due to differences in the way the KPIs are calculated. Even though the KPIs are used to assess our financial condition and results of operations, and these types of measures are commonly used by investors, they have important limitations as analytical tools and should not be considered in isolation from, as substitutes for, or superior to, our unaudited condensed consolidated financial condition or results of operations prepared in accordance with US GAAP. Consistent with how management assesses our business, we also present certain of these KPIs on both a segment and a group-wide bases.

Previous wording

Set forth below is a discussion of our unaudited condensed consolidated results of operations for the three months ended March 31, 2025 and 2024, and our unaudited condensed consolidated financial condition as of March 31, 2025 and December 31, 2024, in each case, on a consolidated basis, unless otherwise noted.

Current wording

Set forth below is a discussion of our unaudited condensed consolidated results of operations for the three and six months ended June 30, 2025 and 2024 and our unaudited condensed consolidated financial condition as of June 30, 2025 and December 31, 2024, in each case, on a consolidated basis, unless otherwise noted.

Previous wording

In this section, any references to 2025 refers to the three months ended March 31, 2025, and any references to 2024 refers to the three months ended March 31, 2024.

Current wording

In this section, any references to 2025 refer to the three or six months ended June 30, 2025 and any references to 2024 refer to the three or six months ended June 30, 2024.

Previous wording

Total revenues increased 168% for the three months ended March 31, 2025, primarily due to an increase in capital provision income, arising from higher fair value adjustments and net realized gains. The increase in total revenues was partially offset by an increase in operating expenses due to increases in compensation-related accruals and case-related expenditures ineligible for inclusion in asset cost. The net result was $30.9 million in net income attributable to Burford Capital Limited shareholders for the three months ended March 31, 2025, as compared to net loss of $29.9 million for the three months ended March 31, 2024.

Current wording

Total revenues increased 20% for the three months ended June 30, 2025, primarily due to an increase in capital provision income, arising from higher fair value adjustments. The increase in total revenues was partially offset by an increase in operating expenses primarily due to increases in share-based and deferred compensation and case-related expenditures ineligible for inclusion in asset cost. The net result was $88.3 million in net income attributable to Burford Capital Limited shareholders for the three months ended June 30, 2025, as compared to net income of $53.7 million for the three months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, net realized gains were $67.6 million, comprising $84.0 million of gross realized gains, offset by gross realized losses of $16.4 million. For the three months ended March 31, 2024, net realized gains were $57.9 million, comprising $73.5 million of gross realized gains, offset by gross realized losses of $15.6 million. There was no single asset that significantly impacted the increase in net realized gains. Overall, net realized gains resulted from $288.8 million in realizations for the three months ended March 31, 2025, as compared to $113.0 million in realizations for the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, net realized gains were $40.3 million, comprising $53.1 million of gross realized gains, offset by gross realized losses of $12.8 million. For the three months ended June 30, 2024, net realized gains were $117.5 million, comprising $128.8 million of gross realized gains, offset by gross realized losses of $11.3 million. While there was more case activity in 2025 as compared to 2024, we did not have a single large realized gain in 2025 of the size we experienced in 2024 which thus impacted our total realized gains. Overall, net realized gains resulted from $90.1 million in realizations for the three months ended June 30, 2025, as compared to $191.9 million in realizations for the three months ended June 30, 2024.

Previous wording

Fair value adjustments, net of previously recognized unrealized gains/(losses) transferred to realized gains, are affected by a number of factors, including changes in discount rate, duration and litigation risk premium, the reversal of previously recognized unrealized gains upon conclusion of a matter and its transfer to realized gains and actual performance of matters as they pass through milestones. All of those factors contributed to the unrealized gain of $57.9 million for the three months ended March 31, 2025, as compared to an unrealized loss of $13.7 million for the three months ended March 31, 2024, with the passage of time and the movement in discount rates having the largest impact.

Current wording

Fair value adjustments, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses), are affected by a number of factors, including changes in discount rate, duration and litigation risk premium, the reversal of previously recognized unrealized gains/(losses) upon conclusion of a matter and its transfer to realized gains/(losses), and actual performance of matters as they pass through milestones. All of those factors contributed to the unrealized gain of $170.9 million for the three months ended June 30, 2025 as compared to the unrealized gain of $39.1 million for the three months ended June 30, 2024, with the passage of time and the Turnover Order (as defined below) having the largest impacts.

Previous wording

As part of our fair value methodology, we discount the expected future cash flows. If discount rates had remained unchanged from December 31, 2024, applying those same rates to the portfolio as of March 31, 2025, fair value would have been approximately $32.9 million lower than as reported. The weighted average discount rate across the portfolio decreased to 6.7% as of March 31, 2025, from 6.9% as of December 31, 2024, and interest sensitivities of the portfolio to assumed basis point changes in rates at each period end are disclosed in note 11 (Fair value of assets and liabilities) to our unaudited condensed consolidated financial statements contained in this Form 10-Q. Fair value is also impacted by changes in the adjusted risk premium, which was down at 30.9% as of March 31, 2025, from 31.4% as of December 31, 2024. The impact of the addition of newly acquired or originated capital provision assets during the period (which generally have higher risk premiums at the start of the capital provision asset’s life) was offset by net favorable developments across the rest of the portfolio.

Current wording

As part of our fair value methodology, we discount the expected future cash flows. If discount rates had remained unchanged from December 31, 2024, applying those same rates to the portfolio at June 30, 2025 fair value would have been approximately $67.1 million lower than as reported. The weighted average discount rate across the portfolio decreased to 6.5% as of June 30, 2025, from 6.9% as of December 31, 2024, and interest sensitivities of the portfolio to assumed basis point changes in rates at each period end are disclosed in note 11 (Fair value of assets and liabilities) to our unaudited condensed consolidated financial statements contained in this Form 10-Q. Fair value is also impacted by changes in the adjusted risk premium, which was down at 31.0% as of June 30, 2025, from 31.4% as of December 31, 2024. The impact of the addition of newly acquired or originated capital provision assets during the period (which generally have higher risk premiums at the start of the capital provision asset’s life) was offset by net favorable developments across the rest of the portfolio.

Previous wording

Third-party interests in capital provision assets reduced capital provision income by $20.8 million for the three months ended March 31, 2025, due to increases in the fair value of the YPF-related assets which were higher in 2025 given the progression closer to our expected conclusion date and a decrease in discount rates.

Current wording

Third-party interests in capital provision assets reduced capital provision income by $43.3 million and $64.1 million for the three and six months ended June 30, 2025, respectively, due to increases in the fair value of the YPF-related assets which were higher in 2025 given the progression closer to our expected conclusion date and a decrease in discount rates. The period-over-period change was also impacted by the Turnover Order.

Previous wording

Asset management income was relatively flat at $1.5 million for the three months ended March 31, 2025, as compared to $1.9 million for the three months ended March 31, 2024. The timing of the recognition of performance fees is variable as they are recognized when a reliable estimate of the performance fees can be made, and it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The maturity and the terms of the applicable distribution waterfall for each of our private funds impacts this timing. As BOF-C and the Advantage Fund are consolidated entities, asset management income from these private funds is eliminated on a consolidated basis and is not reflected here. See “—Asset Management and Other Services segment” for a discussion of our asset management income, reflecting the impact of the income from BOF-C and the Advantage Fund.

Current wording

Asset management income was relatively flat at $1.3 million and $2.9 million for the three and six months ended June 30, 2025, respectively, as compared to $1.6 million and $3.5 million for the three and six months ended June 30, 2024, respectively. The timing of the recognition of performance fees is variable as they are recognized when a reliable estimate of the performance fees can be made, and it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The maturity and the terms of the applicable distribution waterfall for each of our private funds impacts this timing. As BOF-C and the Advantage Fund are consolidated entities, asset management income from these private funds is eliminated on a consolidated basis and is not reflected here. See “—Asset Management and Other Services segment” for a discussion of our asset management income, reflecting the impact of the income from BOF-C and the Advantage Fund.

Previous wording

Other income/(loss) was relatively flat at $(0.2) million for the three months ended March 31, 2025, as compared to $0.3 million for the three months ended March 31, 2024.

Current wording

Other income/(loss) was relatively flat at $0.4 million and $0.2 million for the three and six months ended June 30, 2025, respectively, as compared to $0.3 million and $0.5 million for the three and six months ended June 30, 2024, respectively.

Previous wording

Total operating expenses increased 36% for the three months ended March 31, 2025, driven primarily by higher fair value driven compensation-related accruals and higher case-related expenditures ineligible for inclusion in asset cost related to the restructuring of the EP Funds.

Current wording

Total operating expenses increased 32% for the six months ended June 30, 2025, driven primarily by higher case-related expenditures ineligible for inclusion in asset cost related to the consolidation of the EP Funds, higher share-based and deferred compensation costs and higher fair value driven compensation-related accruals.

Previous wording

The increase in long-term incentive compensation including accruals is correlated to the fair value of the capital provision asset portfolio and in the three months ended March 31, 2025, was primarily related to higher capital provision income in 2025 as compared to 2024.

Current wording

The increase in long-term incentive compensation including accruals for the six months ended June 30, 2025 is correlated to the fair value of the capital provision asset portfolio, which primarily related to higher capital provision income in 2025 as compared to 2024.

Previous wording

Case-related expenditures ineligible for inclusion in asset cost also include some situations where we are effectively the claimant in a litigation matter either due to the acquisition of assets or the assignment of a claim. Such expenditures accounted for $4.3 million and $0.2 million of the total case-related expenditures ineligible for inclusion in asset cost for the three months ended March 31, 2025 and 2024, respectively. While we report these costs as expenses for accounting purposes, we treat them for return and performance purposes no differently than traditional legal finance arrangements.

Current wording

Case-related expenditures ineligible for inclusion in asset cost significantly increased for the three and six months ended June 30, 2025, reflecting an increase in the level of expenses and instances where we incur legal or other related expenses that are directly attributable to a capital provision asset but that do not form part of the deployed amount under a capital provision agreement, such as when we bear incremental legal expenses in cases. Examples of the incurrence of such expenses include situations where we are effectively the claimant in a litigation matter due to the acquisition of assets or the assignment of a claim. Such expenditures accounted for $2.9 million and $0.7 million of the total case-related expenditures ineligible for inclusion in asset cost for the three months ended June 30, 2025 and 2024, respectively, and $7.2 million and $0.9 million for the six months ended June 30, 2025 and 2024, respectively. While we report these costs as expenses for accounting purposes, we treat them for purposes of return and performance metrics as part of the asset’s cost basis in the same way that we treat traditional legal finance arrangements.

Previous wording

Case-related expenditures ineligible for inclusion in asset cost significantly increased for the three months ended March 31, 2025, reflecting an increase in the level of expenses and instances where we incur legal or other related expenses that are directly attributable to a capital provision asset but that do not form part of the deployed amount under a capital provision agreement, such as when we bear incremental legal expenses in cases. Examples of such expenses include fees paid to third parties when our management has sought its own legal advice or expert opinion with respect to matters related to a capital provision asset. These expenses are expected to fluctuate period-over-period and accounted for $0.3 million and $0.5 million of total case-related expenditures ineligible for inclusion in asset cost for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Case-related expenditures ineligible for inclusion in asset cost also include fees paid to third parties when we have sought our own legal advice or expert opinion with respect to matters related to a capital provision asset. These expenses are expected to fluctuate period-over-period and accounted for $1.4 million and $0.7 million of total case-related expenditures ineligible for inclusion in asset cost for the three months ended June 30, 2025 and 2024, respectively, and $1.7 million and $1.2 million for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Foreign currency transactions (gains)/losses were gains of $0.6 million for the three months ended March 31, 2025, as compared to losses of $0.5 million for the three months ended March 31, 2024. The period-over-period change was primarily driven by the strengthening of the sterling pound against the US dollar.

Current wording

Foreign currency transactions (gains)/losses were gains of $1.5 million and $2.1 million for the three and six months ended June 30, 2025, respectively. The period-over-period change was primarily driven by the strengthening of both the pound sterling and euro against the US dollar.

Previous wording

Provision for income taxes was $7.6 million for the three months ended March 31, 2025, as compared to benefit from income taxes of $1.4 million for the three months ended March 31, 2024. The period-over-period change was primarily due to higher net income realized in taxable jurisdictions in 2025 as compared to 2024. Cash taxes paid were $0.4 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Provision for income taxes decreased 61% for the three months ended June 30, 2025, primarily due to higher net income realized in lower taxable jurisdictions in 2025 as compared to 2024. Cash taxes paid were $20.8 million and $7.0 million for the three months ended June 30, 2025 and 2024, respectively.

Previous wording

Net income attributable to non-controlling interests decreased 52% for the three months ended March 31, 2025, reflecting non-controlling interests’ share of income on capital provision assets, the majority of which relates to the decrease in the capital provision income for BOF-C.

Current wording

Net income attributable to non-controlling interests decreased 22% for the three months ended June 30, 2025, reflecting non-controlling interests’ share of income on capital provision assets, the majority of which relates to the decrease in the revenue from the Advantage Fund, primarily due to less revenue generated from the outstanding assets in the fund.

Previous wording

Cash and cash equivalents increased 4% and marketable securities increased 6% both as of March 31, 2025. The net increase in cash and cash equivalents and marketable securities primarily reflects the proceeds received from capital provision assets, partially offset by the funding of capital provision assets and the impact from third-party net distributions.

Current wording

Cash and cash equivalents decreased 21% and marketable securities increased 7% both as of June 30, 2025. The net decrease in cash and cash equivalents and marketable securities primarily reflects the funding of capital provision assets and the usage of cash in the normal course of business (such as payment of expenses and interest), partially offset by the proceeds received from capital provision assets.

Previous wording

Other assets increased 8% as of March 31, 2025, primarily due to higher receivables.

Current wording

Other assets increased 16% as of June 30, 2025, primarily due to higher receivables.

Previous wording

Due from settlement of capital provision assets decreased 44% as of March 31, 2025, primarily due to cash received from realizations during 2025 and collections on the due from settlement of capital provision assets receivable that was outstanding as of December 31, 2024. Of the $183.9 million of due from settlement receivables as of December 31, 2024, 62% was collected in cash during 2025.

Current wording

Due from settlement of capital provision assets decreased 36% as of June 30, 2025, primarily due to cash received from realizations during 2025 and collections on the due from settlement of capital provision assets receivable that was outstanding as of December 31, 2024. Of the $183.9 million of due from settlement receivables as of December 31, 2024, 63% was collected in cash during 2025.

Previous wording

Capital provision assets increased 1% as of March 31, 2025, primarily reflecting the continued deployments into capital provision assets and the impact of fair value gains generated in 2025, partially offset by the impact of realizations.

Current wording

Capital provision assets increased 6% as of June 30, 2025, primarily reflecting fair value gains earned in 2025, and continued deployments into capital provision assets, partially offset by the impact of realizations.

Previous wording

On a consolidated basis, the aggregate fair value of our capital provision assets was $5.3 billion, the aggregate deployed cost was $2.3 billion and the aggregate unrealized gains were $3.0 billion each as of March 31, 2025. The decrease of $72.6 million in deployed cost is a result of the return of capital from realizations, offset by deployments during 2025. See “—Unaudited condensed consolidated statements of operations for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024—Revenues” above for additional information with respect to the change in unrealized gains, which is driven by this period’s fair value adjustment, net of previously recognized unrealized gains transferred to realized gains.

Current wording

On a consolidated basis, the aggregate fair value of our capital provision assets was $5.5 billion, the aggregate deployed cost was $2.4 billion and the aggregate unrealized gains were $3.1 billion each as of June 30, 2025. The increase of $63.6 million in deployed cost is a result of the return of capital from realizations, offset by deployments during 2025. See “—Unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024—Revenues” above for additional information with respect to the change in unrealized gains, which is driven by this period’s fair value adjustment, net of previously recognized unrealized gains transferred to realized gains.

Previous wording

Within total segments (Burford-only), the aggregate fair value of our capital provision assets was $3.6 billion, the aggregate deployed cost was $1.7 billion and the aggregate unrealized gains were $1.9 billion each as of December 31, 2024. The increase of $11.4 million in deployed cost is a result of deployments during 2025, offset by the return of capital from realizations. See “—Segments—Principal Finance segment—Gains from capital provision asset portfolio” for additional information with respect to the change in unrealized gains, which is driven by this period’s fair value adjustment, net of previously recognized unrealized gains transferred to realized gains.

Current wording

Within total segments (Burford-only), the aggregate fair value of our capital provision assets was $3.8 billion, the aggregate deployed cost was $1.7 billion and the aggregate unrealized gains were $2.1 billion each as of December 31, 2024. The increase of $75.7 million in deployed cost is a result of deployments during 2025, offset by the return of capital from realizations. See “—Segments—Principal Finance segment—Gains from capital provision asset portfolio” for additional information with respect to the change in unrealized gains, which is driven by this period’s fair value adjustment, net of previously recognized unrealized gains transferred to realized gains.

Previous wording

During the three months ended March 31, 2025, further restructuring of the Eton Park liquidation led to a modest increase in Burford’s share of proceeds. That restructuring resulted in the consolidation of the EP Funds, which led to an increase of $116.6 million in our capital provision assets, $70.0 million of contingent fees in our other liabilities, $12.2 million in financial liabilities relating to third-party interests in capital provision assets and an expense of $2.8 million in case-related expenditures ineligible for inclusion in asset cost, all on a consolidated basis. On a total segments (Burford-only) basis, deployed cost increased $38.0 million associated with this restructuring of the Eton Park liquidation, which included $2.8 million of case-related expenditures ineligible for inclusion in asset cost.

Current wording

During the three months ended March 31, 2025, further restructuring of the Eton Park liquidation led to a modest increase in our share of proceeds. That restructuring resulted in the consolidation of the EP Funds, which led to an increase of $116.6 million in our capital provision assets, offset by $70.0 million of contingent fees in our other liabilities and $12.2 million in financial liabilities relating to third-party interests in capital provision assets, and an expense of $2.8 million in case-related expenditures ineligible for inclusion in asset cost, in each case, on a consolidated basis as of March 31, 2025 and for the three months ended March 31, 2025. On a total segments (Burford-only) basis, deployed cost increased $38.0 million associated with this restructuring of the Eton Park liquidation, which included $2.8 million of case-related expenditures ineligible for inclusion in asset cost, for the three months ended March 31, 2025.

Previous wording

As of March 31, 2025, on a consolidated basis, the fair value of the YPF-related assets (both Petersen and Eton Park combined) was $2.4 billion. Our cost basis and unrealized gains increased $36.1 million and $125.9 million to $112.5 million and $2.2 billion, respectively, during 2025 arising from the consolidation of the EP Funds.

Current wording

On a consolidated basis, the fair value of the YPF-related assets (both Petersen and Eton Park combined) was $2.5 billion as of June 30, 2025. Our cost basis and unrealized gains increased $108.5 million and $180.9 million to $184.9 million and $2.3 billion, respectively, during 2025. The increase in the cost basis was due to the consolidation of the EP Funds, while the increase in unrealized gains was due to the passage of time bringing us closer to our expected conclusion date and the impact of the Turnover Order.

Previous wording

Within total segments (Burford-only), the fair value of the YPF-related assets (both Petersen and Eton Park combined) was $1.5 billion as of March 31, 2025. Our cost basis and our unrealized gains increased $36.1 million and $36.6 million to $105.6 million and $1.4 billion, respectively, during 2025 due to further deployed costs and progression closer to our expected conclusion date.

Current wording

Within total segments (Burford-only), the fair value of the YPF-related assets (both Petersen and Eton Park combined) was $1.6 billion as of June 30, 2025. Our cost basis and our unrealized gains increased $38.4 million and $118.8 million to $107.9 million and $1.5 billion, respectively, during 2025, due to further deployed costs and the impact of the Turnover Order. The increase in the cost basis was due to the consolidation of the EP Funds, while the increase in unrealized gains was due to the passage of time bringing us closer to our expected conclusion date and the impact of the Turnover Order.

Previous wording

As of March 31, 2025, approximately 54% of our legal finance undrawn commitments related to definitive commitments and approximately 46% related to discretionary, as compared to 49% and 51%, respectively, as of December 31, 2024. The period-over-period decline in undrawn commitments is due to deployments during the three months ended March 31, 2025, which exceeded new commitments added during the same period, and the cancellation of unfunded discretionary commitments related to a single asset.

Current wording

As of June 30, 2025, approximately 61% of our legal finance undrawn commitments related to definitive commitments and 39% related to discretionary, as compared to 49% and 51%, respectively as of December 31, 2024. The period-over-period increase in undrawn commitments is due to new definitive commitments added during the six months ended June 30, 2025, partially offset by the cancellation of unfunded discretionary commitments related to a single asset in the same period.

Previous wording

Our Principal Finance segment funds capital to legal finance assets from Burford’s balance sheet, primarily as capital provision assets, and in limited scope through interests in private funds managed by Burford. These capital provision assets and private fund interests generate our capital provision income, which is the most significant driver of our total revenues.

Current wording

Our Principal Finance segment funds capital to legal finance assets from our balance sheet, primarily as capital provision assets, and in limited scope through interests in private funds managed by us. These capital provision assets and private fund interests generate our capital provision income, which is the most significant driver of our total revenues.

Previous wording

The increase in capital provision income, arising from higher fair value adjustments due to the passage of time and a decrease in discount rates, was the main driver of the increase in income before income taxes for the three months ended March 31, 2025, compared to the three months ended March 31, 2024 on both consolidated and total segments (Burford-only) bases.

Current wording

The increase in capital provision income, arising from higher fair value adjustments mainly due to the passage of time and the impact of the Turnover Order, was the main driver of the increase in income before income taxes for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 on both consolidated and total segments (Burford-only) bases.

Previous wording

An increase in operating expenses, for both consolidated and total segments (Burford-only), partially offset the increase in income before income taxes. The main drivers for the increase in operating expenses on a consolidated basis were an increase in compensation-related accruals and higher case-related expenditures ineligible for inclusion in asset cost, while on a total segments (Burford-only) basis were an increase in compensation-related accruals and higher general, administrative and other expenses. The net result was $44.5 million and $38.5 million in income before income taxes for the three months ended March 31, 2025, on a consolidated and total segments (Burford-only) bases, respectively.

Current wording

An increase in operating expenses, for both consolidated and total segments (Burford-only), partially offset the increase in income before income taxes. The main drivers of the increase in operating expenses on a consolidated basis were an increase in share-based and deferred compensation costs and higher case-related expenditures ineligible for inclusion in asset cost, while on a total segments (Burford-only) basis was an increase in share-based and deferred compensation costs. The net result was $109.7 million and $92.9 million in income before income taxes for the three months ended June 30, 2025, on a consolidated and total segments (Burford-only) bases, respectively.

Previous wording

Total operating expenses for the three months ended March 31, 2025, increased $11.0 million for consolidated basis and $9.9 million for total segments (Burford-only) basis. In each case, the increase in total operating expenses was driven primarily by higher long-term incentive compensation accruals attributable to an increase in capital provision income. Additionally, on a consolidated basis, the increase in total operating expenses was also driven by higher case-related expenditures ineligible for inclusion in asset cost related to the restructuring of the EP Funds, while on a total segments (Burford-only) basis, the increase in total operating expenses was also driven by higher general, administrative and other expenses due to higher professional fees incurred.

Current wording

Total operating expenses, for the six months ended June 30, 2025, increased $21.9 million for consolidated basis and $18.7 million for total segments (Burford-only) basis. In each case, the increase in total operating expenses was driven primarily by higher case-related expenditures ineligible for inclusion in asset cost related to the consolidation of the EP Funds and higher share-based and deferred compensation costs primarily attributable to an increase in deferred compensation expense, due to the movement in the price of Burford shares in 2025 as compared to 2024, as well as additional deferred compensation in 2025. Total operating expenses on a consolidated basis also increased due to higher long-term incentive compensation accruals, driven mainly by an increase in capital provision income. On a total segments (Burford-only) basis, case-related expenditures ineligible for inclusion in asset cost had the least impact.