Greenhaven Road Investment Management, LP on Burford Capital Limited
Thesis
Burford is the dominant litigation-finance platform, with a large historical case dataset that Greenhaven believes improves case selection and underwriting. More than 285 funded cases have concluded with 90% ending in a win or profitable settlement, generating an 82% return on invested capital and a 25% IRR. The key differentiated thesis is Burford's more than $150 million invested in protein price-fixing litigation, where the fund believes potential settlements could reach hundreds of millions of dollars and are largely absent from sell-side expectations. Upcoming trials create a catalyst and successful settlements could also alleviate pressure associated with Burford's debt covenants.
“Proteins are the catalyst.”
Key risks
- Protein litigation can be delayed, lost or settled for less than expected
- Debt covenant pressure could persist if cash realizations take longer than expected