Burford reins in big bets as it eyes law firm investment opportunity

Burford Capital reported a roughly break-even second quarter of 2026 as the litigation funder reined in some large investments and cut management costs following its YPF setback.

The moves follow a March court decision in the US which reversed the $16 billion judgment in the long-running legal battle over Argentina’s takeover of oil company YPF, triggering a $2.4 billion write-down for Burford on what was one of its most valuable assets.

Fewer big bets

On an earnings call last week, chief executive Chris Bogart said Burford had “somewhat reduced our willingness to take on some very large, but only moderately profitable deals” following the YPF decision and increased investor focus on liquidity.

Bogart said very large investments tend to generate lower percentage returns because Burford is unwilling to put substantial amounts of capital into very high-risk cases.

The change has affected Burford's new business mix, with Bogart saying headline commitments were running below their 2025 rate.

Management cuts

Burford has also made cuts across its senior and middle management ranks as it seeks to reduce costs. The changes would remove around $10 million in annualised compensation costs across salaries, bonuses and stock awards.

Bogart said the approximately 160-person company was not embarking on a programme of repeated layoffs, describing the restructuring as a one-off.

Law firm investment

Despite the pullback from some large investments, Burford said demand for litigation finance remains strong.

Chief investment officer Jonathan Molot said the funder continues to receive opportunities through its relationships with law firms and other counterparties, including financing for individual cases and portfolios of disputes.

The funder is backing the recently certified £5 billion UK class action against Google over allegations the tech giant abused its dominance in search advertising.

Burford also sees an emerging opportunity as law firms look to new forms of external capital.

Bogart pointed to a Financial Times report last week that several top US law firms have explored selling stakes to private equity firms. He said there was “strong demand for these kinds of solutions”, although they were not yet widely appearing in the market.

The FT reported that Burford has pitched itself to Big Law firms as a minority investor and has also considered joining a consortium with a private equity buyer.

The comments come amid growing interest from private equity and other investors in taking stakes in law firms. Burford already has exposure to the UK market through a minority stake in litigation specialist PCB Byrne and an investment last year in legal consultancy Kindleworth.