Burford Capital Ltd

We have two reportable segments through which we provide legal finance products and services to our clients: (i) Principal Finance and (ii) Asset Management and Other Services.

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.

Our Asset Management and Other Services segment manages legal finance assets on behalf of third-party investors through private funds and provides other services to the legal industry, for both of which we receive fees. These fees are primarily reflected as asset management income, which is a secondary contributor to our total revenues. As of September 30, 2026, we operated eight private funds and three “sidecar” funds as an investment adviser registered with and regulated by the SEC.

The Asset Management and Other Services segment may also reflect the financial impact of new initiatives in the legal services space, including initial diligence and start-up costs, which may impact segment-level profitability.

Unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025

The table below sets forth the components of our income/(loss) before income taxes by segment for the periods indicated.

The increase in capital provision income, arising from higher fair value adjustments due to the favorable milestone developments in the portfolio, was the main driver of the increase in income before income taxes for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 on both consolidated and total segments (Burford-only) bases.

The table below sets forth the components of our income/(loss) before income taxes by segment for the periods indicated.

Total revenues and total operating expenses decreased, both primarily due to the YPF Judgment Reversal, which was the main driver of the decrease in income/(loss) before income taxes for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 on both consolidated and total segments (Burford-only) bases. In addition, on both consolidated and total segments (Burford-only) bases, operating expenses decreased by lower compensation and benefits costs, partially offset by an increase in case-related expenditures ineligible for inclusion in asset cost.

Unaudited condensed consolidated statements of financial condition as of September 30, 2026 as compared to December 31, 2025

The table below sets forth the components of our unaudited condensed consolidated statements of financial condition by segment as of the dates indicated.

As of September 30, 2026, total assets decreased $2.4 billion on a consolidated basis and decreased $1.6 billion on a total segments (Burford-only) basis. In each case, the decrease in total assets was mainly attributable to a decrease in capital provision assets. See “—Unaudited condensed consolidated statements of financial condition as of September 30, 2026 as compared to December 31, 2025” above for additional information on the components of our unaudited condensed consolidated statements of financial condition.

Group-wide portfolio

Group-wide portfolio refers to the totality of assets managed by us, which includes assets financed by our balance sheet through our Principal Finance segment and assets funded by third parties through our Asset Management and Other Services segment. The table below sets forth the components of our portfolio by segment as of the dates indicated.

Group-wide new definitive commitments

New definitive commitments serve as one indicator of new business activity and reflect new contractual financing agreements, which are inflows to the portfolio or transfers of existing discretionary commitments. Discretionary commitments, which are also included in undrawn commitments as a component of the portfolio, are not included within new definitive commitments. When referring to new definitive commitments for our combined business segments, we use the term “group-wide” as opposed to the term “total segments (Burford-only)”, which we use for our financial results due to the third-party nature of the capital in our asset management business. The table below sets forth the components of our group-wide new definitive commitments of capital provision assets by segment for the periods indicated.

Group-wide new definitive commitments decreased 36% and 42% for the three and nine months ended September 30, 2026, respectively, primarily driven by a shift in the size mix of new definitive commitments originated during 2026, with fewer large commitments than in 2025, while the overall volume of new definitive commitments remained broadly consistent.

Principal Finance segment

Our Principal Finance segment allocates 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 capital provision income, which is the most significant driver of our total revenues.

Given the direct balance sheet exposure in our Principal Finance segment, we generate capital provision income directly from the gross returns of the portfolio, which are driven by the outcomes of litigation and related legal activity. Recognition of capital provision income is based on our fair value methodology, see note 2 (Summary of significant accounting policies) to our unaudited condensed consolidated financial statements contained in this Form 10-Q, for each asset in the portfolio, which we apply quarterly, and the resulting change in fair value across the Principal Finance segment portfolio.

Unaudited condensed statements of operations for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025

The table below sets forth the components of our income/(loss) before income taxes for our Principal Finance segment for the periods indicated.

Total revenues increased 77% for the three months ended September 30, 2026, mainly due to an increase in capital provision income, which was primarily driven by higher fair value adjustments as described below.

Total operating expenses increased 21% for the three months ended September 30, 2026, mainly due to higher compensation and benefits costs.

Total other expenses increased 31% for the three months ended September 30, 2026, primarily due to interest expense related to the issuance of the 2033 Notes in July 2025 and the 2034 Notes in January 2026, partially offset by the repayment at scheduled maturity of the aggregate principal amount of the 6.125% bonds due 2025 in August 2025 and the early redemption of the 2026 Bonds in January 2026.

As a result of the factors described above, income/(loss) before income taxes increased for the three months ended September 30, 2026.

Total revenues decreased for the nine months ended September 30, 2026, partially offset by a decrease in total operating expenses. The decrease in both total revenues and total operating expenses was primarily due to the YPF Judgment Reversal, which resulted in (i) with respect to total revenues, a capital provision loss, net of third-party interest, of $1.6 billion and (ii) with respect to total operating expenses, a decrease in long-term incentive compensation including accruals of $122.6 million. Furthermore, the decrease in total operating expenses as described above was also decreased due to lower compensation and benefits costs, partially offset by an increase in case-related expenditures ineligible for inclusion in asset cost.

Case-related expenditures ineligible for inclusion in asset cost include costs associated with ongoing capital provision assets that are not eligible for inclusion in the fair value of those assets and are therefore expensed as incurred. As of September 30, 2026, the Company has recognized a cumulative $32.7 million of such costs in respect of capital provision assets that remain ongoing.

The increase in this line item for the nine months ended September 30, 2026 is mainly related to situations where we are effectively the claimant in a litigation matter due to the acquisition of assets or the assignment of a claim and case-related expenditures are ineligible for inclusion in asset cost. Such expenditures accounted for $28.4 million, of which $17.8 million arose from the correction in 2026 of certain costs that had been previously included within capital provision assets but which did not meet the applicable criteria for inclusion in the fair value of those assets. The impact of this correction was not material to 2026 or any prior periods.

Total other expenses increased 58% for the nine months ended September 30, 2026, primarily due to higher interest expense related to the issuance of the 2033 Notes in July 2025 and the 2034 Notes in January 2026, partially offset by the repayment at scheduled maturity of the aggregate principal amount of the 6.125% bonds due 2025 in August 2025 and the early redemption of the 2026 Bonds in January 2026. In addition, the increase in other expenses was also primarily driven by the realization during the three months ended March 31, 2026, upon the redemption of the 2026 Bonds, of accumulated foreign currency losses previously recorded in other comprehensive income.

As a result of the factors described above, income/(loss) before income taxes decreased for the nine months ended September 30, 2026.

Gains from capital provision asset portfolio

The table below sets forth the components of our total capital provision income for the periods indicated.

Realized gains

Net realized gains on capital provision assets decreased 41% for the three months ended September 30, 2026, which were comprised of $41.8 million in gross realized gains, offset by $23.0 million in gross realized losses. For the three months ended September 30, 2025, net realized gains on capital provision assets were comprised of $49.5 million in gross realized gains, offset by $17.6 million in gross realized losses. The decrease in net realized gains was due to a single individual realized loss of $19.1 million during the three months ended September 30, 2026. As a percentage of average capital provision assets at cost during the three months ended September 30, 2026, gross realized losses were 4.8% (annualized) as compared to 3.1% for the year ended December 31, 2025.

Net realized gains on capital provision assets decreased 12% for the nine months ended September 30, 2026, which were comprised of $141.5 million in gross realized gains, offset by $59.4 million in gross realized losses. For the nine months ended September 30, 2025, net realized gains on capital provision assets were comprised of $130.3 million in gross realized gains, offset by $37.2 million in gross realized losses. The decrease in net realized gains was due to lower individual favorable conclusions in 2026 as compared to 2025, with the single loss of $19.1 million impacting the result. As a percentage of average capital provision assets at cost during the nine months ended September 30, 2026, gross realized losses were 4.2% (annualized) as compared to 3.1% for the year ended December 31, 2025.

Unrealized gains

Unrealized gains consist of fair value adjustments during the period, which may be offset by the transfer of unrealized gains/(losses) to realized gains/(losses) upon realization of an asset. Fair value adjustments, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses), on capital provision assets increased to $98.0 million for the three months ended September 30, 2026, with several positive milestone developments during the three months ended September 30, 2026 being the largest contributing factor on the change period over period.

Fair value adjustments, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses), on capital provision assets decreased to a loss of $1.5 billion for the nine months ended September 30, 2026, with the YPF Judgment Reversal having the largest impact from an individual matter during the period.

See“—Unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025—Revenues—Capital provision income/(loss)” above for additional information with respect to the year-over-year change of fair value adjustment, net of previously recognized unrealized gains/(losses) transferred to realized gains/(losses).

Unaudited condensed statements of financial condition as of September 30, 2026 as compared to December 31, 2025

The table below sets forth the components of our unaudited condensed statements of financial condition for our Principal Finance segment as of the dates indicated.

Total assets decreased 33% as of September 30, 2026, primarily due to a decrease in capital provision assets. See“—Unaudited condensed consolidated statements of financial condition as of September 30, 2026 as compared to December 31, 2025”above for additional information.

Portfolio value – Principal Finance segment

The table below sets forth the components of our portfolio for our Principal Finance segment as of the dates indicated.

Total portfolio decreased 28% as of September 30, 2026, mainly driven by decreases in fair value of capital provision assets, primarily resulting from the YPF Judgment Reversal. Capital provision assets include our investment in the Advantage Fund which makes up less than 1% of the total portfolio as of September 30, 2026.

The table below sets forth our deployments and realizations for our Principal Finance segment for the periods indicated.

The table below sets forth our deployments and realizations, for the periods indicated, adjusted primarily to (i) include case-related expenditures ineligible for inclusion in asset cost for our deployments and (ii) include (a) realizations arising from income on due from settlement of capital provision assets and (b) in cases where our interest is held through a private fund, adjust to reflect realizations based on the timing of occurrence with the capital provision asset and not when distributed out by the private fund for our realizations. See“—Reconciliations—Deployments reconciliations” and “—Reconciliations—Realizations reconciliations” for additional information with respect to the difference between the Principal Finance segment and the Burford-only basis tables.

For both the Principal Finance segment and the adjusted Burford-only basis, total deployments decreased by 28% and 21%, respectively, for the three months ended September 30, 2026. For both the Principal Finance segment and the adjusted Burford-only basis, total deployments decreased, by 11% and 12%, respectively, for the nine months ended September 30, 2026. The decrease in deployments for both the Principal Finance segment and the adjusted Burford-only basis was primarily from lower amount of monetization deals in 2026 compared to 2025.

We count each of our contractual relationships as an “asset”, although many such relationships are composed of multiple underlying litigation matters that are often cross collateralized rather than reliant on the performance of a single matter. As of September 30, 2026, our Principal Finance portfolio consisted of 233 assets funded directly by our balance sheet and four additional assets held through the Advantage Fund. As of December 31, 2025, our Principal Finance portfolio consisted of 237 assets funded directly by our balance sheet and four additional assets held through the Advantage Fund.

For both the Principal Finance segment and the adjusted Burford-only bases, total realizations decreased by 17% and 12%, respectively, for the three months ended September 30, 2026. For both the Principal Finance segment and the adjusted Burford-only bases, total realizations decreased by 17% and 14%, respectively, for the nine months ended September 30, 2026. There can be variability of timing of realizations during the quarters, though the decrease in realizations over the year was largely due to a single asset that generated $93.8 million in 2025 for both the Principal Finance segment and the adjusted Burford-only basis, that did not recur in 2026.

Undrawn commitments – Principal Finance segment

The table below sets forth the components of our total capital provision undrawn commitments for our Principal Finance segment by type for the periods indicated.

Undrawn commitments decreased 2% as of September 30, 2026 as compared to September 30, 2025, primarily due to higher deployments and retirements, partially offset by new definitive commitments originated during the period.

Portfolio tenor

The timing of realizations is difficult to forecast and is rarely in our control. The reality of litigation is that most cases settle and pay proceeds in a relatively short period of time, and a minority of cases go on to adjudication, which takes longer. Adjudication timing is subject to a myriad of factors, including delaying tactics by litigation opponents and court dockets and schedules, and the Covid-19 pandemic added to this uncertainty. However, we are now seeing the impacts from the Covid-19 pandemic subsiding. We believe that the impact of the Covid-19 pandemic delaying trial dates also caused a delay in settlement timing, as an impending trial often can be a catalyst for a settlement. We do not believe there is a correlation between asset life and asset quality and endeavor to structure our asset pricing to compensate us if assets take longer to resolve.

We provide extensive data about the WAL of our concluded portfolio, although this data may not be predictive of the ultimate WAL of our existing portfolio. The WAL of our concluded portfolio may lengthen over time if the longer-tenor assets in our existing portfolio account for a greater share of future concluded cases. Conversely, if our larger, more recently originated cases conclude relatively quickly, the WAL of our concluded portfolio could decrease.

In calculating the WAL of our portfolio, we compute a weighted average of the WALs of individual assets. On that basis, we assess the weighted average lives (beginning at the point of average deployment) of the concluded portfolio, weighted both by deployed cost and realizations. Weighting by deployed cost provides a view on how long a dollar of capital is deployed on average, while weighting by realizations provides a view on how long it takes to recover a dollar of return on average.

The WALs of the 303 concluded assets as of September 30, 2026 increased slightly as compared to the WALs of the 277 concluded assets as of December 31, 2025. The table below sets forth the WALs, weighted by deployed cost and realizations, of the concluded assets, excluding the impact of our interest in private funds, as of the dates indicated.

The age of our ongoing portfolio is reflected in the WAL of active deployed capital in the table below. Although we provide information for our portfolio by vintage years, the deployed cost for each vintage is generally financed across multiple years and the WAL of active deployed capital calculates the length of time our deployments have been outstanding based on the date when capital was deployed.

Returns on concluded portfolio

The table below sets forth our ROIC, IRR and cumulative realizations on concluded and partially concluded assets in our capital provision portfolio, excluding balance sheet allocations through private funds and post-settlement deals, as of the dates indicated since inception on a Burford-only basis.

As our older vintages conclude, we may see IRR decrease as the impact from the Covid-19 pandemic caused delays in settlement timing. In addition to legal finance assets funded directly through our balance sheet, our Principal Finance segment also selectively allocates balance sheet capital through interests in certain private funds, which tend to target a lower overall risk return profile. Returns from these concluded or partially concluded assets invested through private funds and post-settlement deals are not included in the ROICs and IRRs in the table above. For the concluded or partially concluded assets from the balance sheet’s interest in the Advantage Fund and post-settlement deals, these assets generated $86.8 million of realizations, resulting in a ROIC of 21% and IRR of 27%.

We do not consider matters to be concluded (and therefore part of these return metrics on our concluded portfolio) until there is no longer any litigation risk remaining. Return metrics on our concluded portfolio do not include fair value adjustments, either positive or negative. As a result, these return metrics do not include the positive or negative impact of developments on matters while they remain pending.

The table below sets forth the deployments by vintage for the periods indicated.

Total capital provision asset deployments were $94.0 million during the three months ended September 30, 2026. Of the total capital deployed during 2026, 14% was related to the vintage year 2020 and earlier vintage years.

Total capital provision asset deployments were $269.1 million during the nine months ended September 30, 2026. Of the total capital deployed during 2026, 23% was related to the vintage year 2020 and earlier vintage years.

The table below sets forth the realizations by vintage for the periods indicated.

Total capital provision asset realizations were $74.6 million during the three months ended September 30, 2026. Of the total realizations during 2026, 19% was related to the vintage year 2020 and earlier vintage years.

Total capital provision asset realizations were $244.3 million during the nine months ended September 30, 2026. Of the total realizations during 2026, 35% was related to the vintage year 2020 and earlier vintage years.

Asset Management and Other Services segment

Our Asset Management and Other Services segment manages legal finance assets on behalf of third-party investors through private funds and provides other services to the legal industry, for both of which we receive fees. These fees are primarily reflected as asset management income, which is a secondary contributor to our total revenues.

Our internal allocation policy strictly prescribes the allocation of third-party private fund capital by private fund based on the risk/return profile of assets, thus removing any potential allocation conflicts of interest with our Principal Finance segment.

We generally conduct our private fund activities through limited partnerships. Each private fund that is a limited partnership has a Burford-owned general partner that is responsible for the management and operation of the private fund’s affairs and makes all policy and asset selection decisions relating to the conduct of the private fund’s business. Except as required by law or as specified in a private fund’s governing documents, the limited partners of the private funds take no part in the conduct or control of the business of the private funds, have no right or authority to act for or bind the private funds, have limited visibility and input into the actions and decisions of the general partner and have no influence over the voting or disposition of the securities or other assets held by the private funds. Each private fund engages an investment adviser. BCIM serves as the investment adviser for all of our private funds and is registered under the Investment Advisers Act.

In addition, we operate certain “sidecar” funds pertaining to specific assets and had three active “sidecar” funds as of September 30, 2026. A “sidecar” fund is a pooled investment vehicle through which certain investors co-invest directly in specific assets alongside our private funds. Except as required by law or as specified in a “sidecar” fund’s governing documents, the investors in the “sidecar” funds take no part in the conduct or control of the business of the “sidecar” funds, have no right or authority to act for or bind the “sidecar” funds, have limited visibility and input into the actions and decisions of the general partner or manager of the “sidecar” funds and have no influence over the voting or disposition of the securities or other assets held by the “sidecar” funds. Our interest in the “sidecar” funds is generally limited to the opportunity to earn incentive fees, if any. The discussion of our private funds ignores “sidecar” funds, unless specifically included, and we collapse fund structures into overall strategies, ignoring, for example, onshore and offshore separations and parallel funds.

Unaudited condensed statements of operations for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025

The table below sets forth the components of our income/(loss) before income taxes for our Asset Management and Other Services segment for the periods indicated.

Total revenues increased for the three months ended September 30, 2026, primarily driven by higher asset management income, reflecting an increase in capital provision income earned by BOF-C and, therefore, more profit-sharing income from BOF-C contributing to asset management income for 2026.

Total operating expenses decreased for the three months ended September 30, 2026, primarily due to a decrease in compensation and benefits costs.

As a result of the factors described above, income/(loss) before income taxes increased for the three months ended September 30, 2026.

Total revenues increased 41% for the nine months ended September 30, 2026, primarily driven by higher asset management income, reflecting an increase in capital provision income earned by BOF-C and, therefore, more profit-sharing income from BOF-C contributing to asset management income for 2026. The increase in total revenues was partially offset by lower management fee income and performance fee income from our private funds as they are in run off and are therefore earning less income period-over-period.

Total operating expenses decreased 21% for the nine months ended September 30, 2026, primarily due to a decrease in compensation and benefits costs.

As a result of the factors described above, income/(loss) before income taxes increased for the nine months ended September 30, 2026.

Asset management income

Asset management income is generally categorized as either (i) management fees, which are recurring fees paid to Burford for investment management services and typically being a rate of 2% or less charged on the basis of some component of assets under management in each fund, (ii) profit sharing income, which represents income from bespoke profit-sharing agreements with third-party investors, such as our strategic sovereign wealth fund partner or (iii) performance fees, which are fees paid to Burford contingent on satisfying certain performance thresholds as designated by each fund waterfall. 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.

The table below sets forth the components of our asset management income for the periods indicated.

Asset management income increased for the three months ended September 30, 2026, primarily due to higher profit-sharing income from BOF-C, mainly from higher total revenues related to BOF-C's capital provision assets primarily reflecting higher unrealized fair value adjustments.

Asset management income increased 39% for the nine months ended September 30, 2026, primarily due to higher profit-sharing income from BOF-C, mainly from higher total revenues related to BOF-C's capital provision assets primarily reflecting higher unrealized fair value adjustments. The increase in asset management income was partially offset by lower management fee income and performance fee income from our private funds as they are in run off and are therefore earning less income period-over-period. Starting December 1, 2025, the management fee rate for the remaining active fund, BOF, dropped from 2.0% to 0.5% per annum.

Unaudited condensed statements of financial condition as of September 30, 2026 as compared to December 31, 2025

The table below sets forth the components of our unaudited condensed statements of financial condition for our Asset Management and Other Services segment as of the dates indicated.

Total assets increased 4% as of September 30, 2026, primarily due to the related receivables arising from asset management income and the acquisition of an equity method investment.

Portfolio value – Asset Management and Other Services segment

The table below sets forth the components of our portfolio for our Asset Management and Other Services segment as of the dates indicated.

Total portfolio value, funded by third parties, decreased 11% as of September 30, 2026. The decrease in our total portfolio was driven by lower fair value adjustments and the impact of realizations in 2026, without offsetting new deployments in certain private funds for which the investment period has ended.

Private funds

As of September 30, 2026, we operated eight private funds and three “sidecar” funds as an investment adviser registered with, and regulated by, the SEC. The table below sets forth key statistics for each of our private funds as of the date indicated.

Our total AUM was $3.0 billion and $3.2 billion as of September 30, 2026 and December 31, 2025, respectively. AUM reflects the fair value of the capital invested in private funds and individual capital vehicles plus the capital that we are entitled to call from investors in those private funds and individual capital vehicles. The total portfolio value shown for our Asset Management and Other Services segment of $1.6 billion reflects the fair value of portfolio assets plus the undrawn commitments to portfolio assets, but excludes the balance sheet’s interest in the Advantage Fund, which is reflected in the portfolio value for our Principal Finance segment.