Trevor Griffiths

Webcast participant Trevor Griffiths questioned why clients would choose to settle cases for lower returns when waiting for an adjudication win offers significantly better economics for only a marginal increase in case duration.

Answer

CIO Jonathan Molot explained that the primary driver is risk, not just duration. A settlement eliminates the binary risk of a total loss at trial. He noted that clients accept a discount for this risk elimination and that Burford's own terms may be more favorable for settlements, as a trial involves taking on additional risk for which a higher premium may be charged.

Trevor Griffiths, via webcast, asked if the new focus on 'targeted realizations' for measuring staff performance would create a reduced incentive to pursue 'jumbo wins'.

Answer

CEO Christopher Bogart and CIO Jonathan Molot clarified that the focus on targeted realizations does not disincentivize jumbo wins. Molot explained that a case with the potential for outsized returns would actually have a higher targeted realization number, although it is always risk-adjusted. He emphasized that the company still pursues a mix of opportunities, including lower-risk deals with attractive IRRs.