Alphyn Capital makes its case for investing in Burford

Alphyn Capital, a New York-based investment firm, is bullish on its investment in Burford Capital.

In his latest letter to shareholders, founder Samer Hakoura sets out his thesis for investing in the global litigation funder. He notes that even if Burford operates in run-off mode, where it incurs operating costs until it concludes all outstanding matters in, say, five years, it could generate cumulatively $8 per share in pre-tax profit, compared to a share price of approximately $10. In other words, even in an unrealistically negative case, it should get 80% of its investment back in 5 years. And he fully expects the biggest litigation funder with a strong brand in the market to do much better than this in practice.

He also points to a significant event that could make his investment a homerun: the outcome of its YPF case against Argentina. Should Burford win, it could receive net proceeds between $1.1bn and $5.6bn, a huge amount in relation to Burford’s current market capitalization of approximately $3bn.

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Insights

A report on class action recoveries: Why companies opt out and what they stand to gain

New research commissioned by Burford Capital demonstrates that companies that choose not to opt out of a class action proceeding do so for economic reasons, and that companies with large claims stand to recover more and can preserve their budgets by using legal finance as part of their opt out strategies. The research also shows that companies already using legal financing are opting out three times more often than their competitors.

Funder News

Burford Capital appoints Jordan Licht as Chief Financial Officer

Jordan Licht has been appointed as Chief Financial Officer of Burford Capital. Mr. Licht was previously the Chief Operating Officer of both Caliber Home Loans and Newrez LLC. He replaces Ken Brause, who becomes a Senior Advisor to Burford and will assist in the CFO transition.

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