I would now like to hand over to your host, Christopher Bogart, Chief Executive Officer, to begin. Christopher, please go ahead.
Thanks very much, Megan, hello, everyone. Thank you very much for taking some time today to talk to us about Burford. [audio distortion] Burford's Chief Investment Officer, and Elizabeth O'Connell, Burford's Chief Financial Officer. We'll split up the presentation as we go. I'll talk for a little while and walk through some of the slides, Jon will do the middle investment piece, and Elizabeth will do some financial slides at the end. We're not going to cover every single one of these slides, although we will tell you where we are as we go. We're going to really be centering our presentation around three fundamental themes today. Around performance, around the growth of the business, and significantly, around the continuing evolution of the business, not only its growth and scale, but also the evolution of what it does within the legal industry.
We also are going to be highlighting for you some new disclosure that we're making that we hope will meet with your approval and will assist in your greater understanding of the business. Starting on slide three, this slide really touches on the theme of performance. What you see and what we're happy to provide is some nice results for the year. Steady increases across the board, income, operating profit after tax, and a significant increase in our generation of cash, much of which we turn around and reinvest in new investments. You'll see there a pretty significant jump in total assets. That jump is because we had a particularly strong year of deployments into investments in the business. That's very good news because it's obviously those deployments that ultimately make us our money.
There is a return on equity impact from having that kind of jump in total assets, which is also a big jump in net assets. Our ROE, which was 37% last year, would have been 34%, but for the new equity issuance. Obviously, the impact of that increase in net assets, which is always going to be the case if we have a significant uptick in deployments like that. That's good news from our perspective. In the middle of the bottom row, you'll see our usual presentation of balance sheet portfolio returns in the core litigation finance portfolio. I think the real message there is around consistency. Those returns have now been generated on more than $1 billion of investment recoveries. Across that large and multi-year track record, you've seen pretty consistent IRRs. The ROICs, the nominal returns bounce around a little bit.
They've bounced up this year to a particularly high level. We don't, again, hold that as a trend. What we have historically said is that across that range are the kinds of returns that conventional litigation finance investments have historically produced. Finally, you'll see that even though the recoveries keep on coming, the portfolio duration remains nicely below two years. Turning to slide four, this is really where we talk about growth. The way that the business grows is obviously by making new investments and by deploying capital against those new investments, which some lengthy and unpredictable time later, hopefully turns into profitability. What you see here is a real step change in the business. In 2017, we saw a big explosion of growth. We wrote three and a half times more business in 2017 than we did in 2016.
Included in that 2017 business were two particularly large, unusually large for us, investment deals totaling $350 million. A $200 million portfolio and a $150 million portfolio. Just for contrast, while we always have done some large chunky deals, in 2018, the largest investment, largest portfolio deal we did was $87.5 million. What we saw in 2017 was a big step up in numbers, but in part fueled by those two large deals. I think the big question, both for us and for investors was, whether we were going to be able to repeat that level of activity in 2018. The answer turned out to be yes, and not only yes, but yes, without those two large anchor investors. That's only part of the story, and the other part is deployment. As you can see on the chart on the right, deployments were up materially.
I particularly highlight the gray portion of this chart, which is the balance sheet deployments. Those rose 51% year-over-year. That's a significant pool of capital sitting out there in the market awaiting returns. Slide five is the evolution. This is nothing new on one level. We have talked about all of these things before, and we've talked about how the business is continuing down this path. Really, we wanted to shine a particular spotlight on how much the business is evolving this year. These boxes show the various things that we do, but the circle chart is particularly interesting because this year across the business, including our investment funds, only 50% of the capital that we committed went to traditional litigation finance.
That number would be 57% for the balance sheet. The rest of what we're doing remains absolutely core to our legal background and legal discipline. We're not straying outside the legal industry. There's no style drift here. What there is an increasing desire by clients to have capital available in all sorts of different ways. Jon is going to talk later about our principal strategies or our complex strategies business. This is clearly an area of growth for us as well. You'll see that 30% of our investment commitments went to that category. Just to frame that for you for a second, what does that actually mean? It simply means a different way of responding to capital demand in the market for litigation-related activities. You can imagine, many of you are fund managers.
The traditional litigation finance business is for Burford, is for you to have an investment. Let's say something has gone wrong with your investment, and you have a litigation claim to be brought against it. You would historically have come to us for capital because you neither have a good path to capital in your own structure, nor do you particularly want to be spending fund capital, even if you could, on paying expensive lawyers to go and litigate. You'd come to us, you'd continue to hold the stock, and we would finance your legal fees so that you could bring your claim. If we were successful, we would share the proceeds. That's basic litigation finance.
What we increasingly hear from clients is that that's, while a good solution for some, not a terrific solution for others, because you're still having to spend valuable time and resources and energy on something that is, frankly, outside your core expertise and area of interest. The alternative is for you to show up and say, "Gee, we've got this claim, we don't want to be involved in the management of it. We'd rather you do that. Instead of just financing our legal fees, why don't you take the stock position from us and bring the litigation for us on the back of the stock?" That's good for Burford in a number of ways.
In the traditional financing context, if we had lost that case, then we would have lost all of our capital, which happens to us in some number of cases every year. Whereas if we hold the underlying asset, then even if we lose the case, we won't lose all of our capital. We still have an asset there that has some value associated with it. We also have a more efficient process that we have a greater level of control in. All of these expansions, all of this evolution, is just a number of different ways for us to take what we have built, this premier brand and premier collection of people in the legal industry, and put their talents to work, put that expertise to work in a number of different investment propositions.
Turning to slide six, this really just is a more granular illustration of that theme of evolution and diversity. The chart breaks down for you the different kinds of things that we do across their capital sources. This chart also is about scale. It makes the very important point that we are the clear industry leader here. Scale is important in this industry. With $2.5 billion in current investments, we far outstrip any other player in the space. That's very relevant when we're dealing with large corporate clients and global law firms. There's simply a level of expertise and service that we can provide. Turning to slide seven, continue the theme of diversity, this is diversity on the capital source side. We believe in having a number of capital sources where we try to optimize a combination of risk, cost of capital, and flexibility.
We obviously have a large balance sheet that we invest directly from. We also have been developing our private funds business with considerable success over the last several years, and that now stands at $2.5 billion of AUM, up from $1.7 billion last year. We're delighted to have a new strategic capital relationship with a large sovereign wealth fund that puts us on a path just in that relationship alone for another $1 billion of capital investment on the terms that are described there. What we have, we believe, is a nice collection of ways to finance our growth as opposed to being dependent on any one portion of the financing market. I'm going to skip now a number of pages which are familiar to you, and we're certainly happy to come back and take questions on them.
Before I go to the next theme of our discussion, I also just wanted to reiterate a point that's made in the annual report. We moved it up front this year just to emphasize its importance. Frankly, the best time to talk about these things is when you're coming off of a strong set of results, and that's with respect to the risk of volatility in this business. The simple reality is that we can't predict the timing or the quantum of investment outcomes. We're subject to the processes and the timing of the many varied court and arbitration processes in which we invest. That's particularly important now when we've just had a very significant increase over the last two years in the volume of business that we've done.
We've written more business in the last two years than we've written in our entire history before that. Very little of that business is mature yet. If anything, the risk of volatility of earnings in the business is greater now than it ever has been, even though we believe that that significant increase in business activity sets the business up very nicely for long-term profitability. We do encourage investors to read that section in the annual report. I'm now going to start talking about the business in a more granular level. On the way, I'm going to pause on slide 15 just for a moment to show a clear data point around scale and the competitive context in the litigation finance industry. Just to make the point here that by any metric, Burford stands head and shoulders above its competitors. That's not just bragging.
That's relevant to the kinds of business that we're able to attract and close. It's simply the case that a number of the other players in this industry simply lack the scale and the financial resources to do what we're able to do. Now I'll turn to slide 18, and we're going to start digging into 2018 activity. Slide 18 shows you the funnel of business that we've provided to you before. That there are two big takeaways from this slide. The overall message is that we have seen a significant improvement in the quality of matters coming in the door. That has enabled us to close more investments from that inbound pool of inquiries than we've been able to before. We think there are two reasons for that. One is that we think the market in general is becoming more knowledgeable.
In other words, lawyers, when they contact us, are having a better sense of what kind of investments are likely to work and what kind are not. The overall quality of even the inbound leads is improving. The other reason is that we've devoted some real time, energy, and resources into building a first-class origination function. While we're always excited to get business from any source, what we find is that when we get business that comes through our origination channels, that business has a 3.5x greater likelihood of actually progressing into our investment pipeline process. That's what we believe accounts for this increase in closed investments. Slide 19 is the usual chart that we have provided to you. I'm not going to go through this in any great detail.
I would highlight for you the point about single case commitments. Single case investments rose sharply for us, up 175%. The reason that's exciting for us is because single cases tend to be entry-level products for new relationships. What that means is that a number of lawyers or law firms that had not worked with us before have come in the door for single case financing. Historically, we've had about a 75% conversion rate of those new client relationships into repeat business for us. While I'm here, I'd also note a new disclosure point. We have put up on our website under the Investor Information tab in our Investor section, a very expanded disclosure about our investment portfolio.
We've historically provided some information about concluded investments, this year we've gone far further, we've provided granular information about every single investment that we have, the ones that have finished, the ones that are still ongoing, and the ones that are partially realized. We've provided not only the basic financial metrics around those investments, but we've provided information about their industry, their geography, and some other information. We hope that investors will find that significant increase in disclosure an interesting way of looking at our portfolio. The data is dense, and that's simply because we have an awful lot of investments. It'll take some time to work through, and we'd love your feedback on that incremental disclosure. Slide 20 is a chart that we've shown you before, and I'm going to spend just one moment on it because it can be slightly confusing.
Obviously, as I said before, deployments are fundamentally how we make our money, and we're very enthusiastic about crossing the billion-dollar deployment mark this year. On the balance sheet, actually, that was $637 million, up 51%. What the message of this chart is not only that over time, we've historically deployed 84% of the commitments that we've written, that's important as a way of making sure that we're actually going to make money on the commitments that we write. What this chart also shows you is that dynamic that I was describing earlier about 2017. If you look at the black line, the black line tells you in 2017 what percentage of each year's commitments were deployed. What you'll see is in 2017, because we wrote those large deals, we only actually deployed 27% of the commitments that we wrote that year.
What happened in 2018 is not only that our and that's the red line, not only did our 2018 deployments against 2018 commitments go up markedly. We also deployed quite a lot of capital against our 2017 commitments. In other words, we had a little gap of a pause from those new 2017 commitments, and we made up for that in 2018, which is why we had such a significant commitment number. Finally for me, slide 21, just makes the theme about growth again. This is really global growth. What we've done for the first time, the chart on the left is new disclosure for us. We provided a segment analysis, and you can see the underlying components in that new website chart. We've rolled up the various geographic elements to the business.
It's important to read the note about this, about how we've done this, because this business is inherently difficult to characterize by geography. Let's take a case like Petersen, for example. Petersen is a case where we're financing a Spanish client against a South American defendant in a case that's currently pending in federal court in the U.S. It begs the question of, is that an American case? Is that a European case, or is that a South American case? For cases like that, we've categorized them by where they're pending as opposed to where the client is or where the assets are. Some of them are simply too difficult to characterize, and those have fallen into a bucket that we call global.
Nonetheless, we hope that this new disclosure does answer the question that we're often asked about the geographic diversification of the portfolio. The part that I would emphasize there about that is just the fact that we're truly a global player. We have offices around the world. This year, we opened a new office this year in both Washington, D.C., and in Sydney, and we have lawyers from all over the world as well. We're excited to see what kind of global trends the business can illustrate for us in the next several years. With that, I'll pass you over to Jonathan Molot, Burford's Chief Investment Officer.
Thank you, Chris, thanks to all of you for spending the time with us today, and for those of you who have been investors, for your placing your confidence in us. I want to say thanks in particular, I know listening to this call is our team. When Chris and I tout our 2018 results, we're really bragging about the team that has made these results possible. As Chris said, it's a global business. We've been hiring the brightest and the best. When I think back to nearly a decade ago when Chris and I launched this business, it was a big leap of faith for someone to leave a top job at a law firm or an in-house position at a top company with stellar resumes and come to Burford when the industry wasn't really known and Burford didn't have a brand.
Our years of success, not just financial success, but also the reputation we've developed in the market working with the top law firms, has made it so that litigation finance is not a new industry by any means. In that industry, Burford is the elite player. Success has begotten success insofar as we've been able to attract the brightest and the best, who see Burford as the place to work, and it's a very exciting place to work. The amazing thing is these are people who come, and one could think, well, because of the prestige, they're coming to an established institution, and that's a wonderful thing. They're also ambitious for themselves, for the company, and for the market and what we can achieve in transforming the market for legal services.
Burford, despite its growth and global presence, has maintained a hunger and a commitment to innovate that I think we're just so lucky every day to have this team to work with. On slide 22, this is the portfolio that this team has been able to put together. It is such a strong portfolio. We've got over $1.9 billion in investments across more than 100 investments across more than 1,000, actually more than 1,100 cases. It's widely diversified by jurisdiction, by defendant, by subject matter. Basically anything you could diversify by. The largest law firm relationships are really relationships with a lot of different law firm partners running lots of different disputes in a number of different jurisdictions and subject matters. The diversification is vitally important.
We have said from the beginning, this is not a business where you make your money by making a few small, concentrated bets. The key to our success over time has been having a diverse portfolio. Our team completely understands that, and we've worked very hard to build that diverse portfolio. You can see in the graphics the division among the various ways we deploy capital, whether portfolios, single cases, complex strategies and recourse financing, which I'll talk a little bit about, legal risk management and asset recovery, which I'll also talk about. You'll see how the balance sheet commitments have increased over time to be quite significant numbers, and you'll see the portion of it that is already deployed and undrawn commitments. If we turn to slide 23, you'll see, well, what can I expect of that portfolio that we have great confidence in?
Chris and I have studiously avoided making predictions. As Chris says, predicting the exact size of the outcome, and in particular, predicting the timing, right? It is a lumpy business as to when things resolve. Nonetheless, past results give us optimism. If you look at slide 23, you'll see that we've now had over $1 billion of recovery on investments. This is a well-tested portfolio approach. You'll see that as of 2018, our return on invested capital across all those, including net of losses, is 85%. That's the return on invested capital with 30% IRRs. The weighted average duration remains below two years. That has moved around a little bit, but I'll talk a little bit about that being a product of some cases go all the way, and some of them resolve earlier through settlement. It's just been a very steady performance.
Even if you can't predict the timing of when any particular matter or even a concentration of matters will resolve, over time, we have seen that the portfolio has performed. If you turn to slide 24, this is a chart you're all familiar with if you've been with us for a while. As Chris mentioned, for the first time on our website, we've provided much more detail backing up this chart, not only on concluded matters, which we've done some of in the past, but also on ongoing investments. We've wanted to be as transparent as possible with our investors, mindful though that we do not want to disclose things that would breach our confidentiality obligations to our clients. We've said in the past, you can't judge any particular year and say, "Oh, were you asleep that year? Did it not go well?
Why was that year so stellar?" These will bounce around as things that are still ongoing resolve for a number of years. 2010 looked like a weak portion of it, We've had resolutions that have changed the dynamic of that particular vintage. Again, the emphasis is not on how any single year performs, but rather on how the portfolio as a whole performs over time. We often get two questions about this chart with people looking at it. One would be, well, so these look good for the resolved investments. How do I have any confidence that the unresolved really are going to pay? What would it mean if they didn't pay? What would the results look like then?
I will say first, if you turn to the next slide, 25, that will show you in a worst-case scenario, which we do not expect ever to happen. If we were to lose every outstanding matter, scrolling back for a second, we're saying everything through the 2015 vintage. Back to 24, if you took the entire left part of that chart and the top of the right, everything through 2015, and now look at slide 25 and said, all of them, of all the remaining matters produced a zero, we would still have a 41% return on invested capital and a 15% IRR. We don't expect that to happen, but we want to point out that the past portfolio has performed regardless of what faith you have in the remaining matters.
If you turn to slide 26, you'll see why, despite not making predictions, there is no reason to believe that simply because a matter is older, it is likely to underperform. In fact, slide 26 points out something we've emphasized in the past, but we haven't quite shown graphically this way, which is, of course, in this business, since we are betting on disputes, there are two ways for disputes to resolve. One is through a complete adjudication where an arbitration tribunal or a court issues a judgment, and that ends it. The other is through a settlement before it gets to the end. As you can see from the numbers on the right, although our overall portfolio has produced an 85% return on invested capital and a 30% IRR, where there is an adjudication, we have had a higher return on invested capital and a lower IRR.
161% return on invested capital with a 25% IRR. Where there is a settlement, those average out to a 52% return on invested capital, lower than the average, but a higher IRR, 46%. Why is that? Well, it's because when matters settle, you are taking a discount off of your full entitlement in exchange for no longer absorbing the risk associated with an adjudication and for the time value of money. Makes sense, the IRRs would be higher, but you wouldn't be collecting as much in absolute dollars, so you'd have lower returns on invested capital, but you'd have that capital back to reinvest. On the other hand, when things go the distance, if you win, and we win more often than not, the adjudications end up producing the home runs, the much bigger hits.
The IRRs may not look as high because it's taken longer to get there, but the returns on invested capital have been quite attractive. With respect to the charts before, what do we think about the older ongoing matters? Those are matters that are poised to have the binary outcome of potentially very large recoveries, and that's what we've seen in our past performance. Sometimes people ask which...
Sounds like Jon has mysteriously vanished into the ether. While we wait for him to return, I will pick up. Jon was about to talk about slide 27. What slide 27 shows you is a very important point that dovetails with the earlier slide that I discussed about the evolution of the business. In that slide, we showed you all the various things that we did. There's no question that those things have different economic characteristics. They have different levels of risk. They have often different durations. Consistent with those different risk and duration levels, they come with different pricing and therefore different returns for us. We sometimes get the question, well, given that you're in a growing market, why don't you simply do only the subset of things that are the highest potential return opportunities?
I think the answer to that is by this chart here. Operator, I just want to make sure that I'm still on this call.
Hi, I'm back. I do not know what happened. My line disconnected. Can you hear me?
Yeah, I took you in the middle. I was in the middle of slide 27. I was introducing the concept that there were varying levels of risk and duration.
Sure. I guess what I would say about that is before I was saying that, in fact, we are to some extent indifferent whether things settle or go to trial, we don't control it. There is one category where we can have some influence over the composition in terms of duration, and that is with our Principal Strategies investments. We have chosen purposely investments where you can end up with quite attractive returns with shorter durations. We, as Chris mentioned earlier, end up having a greater control over the timing of resolution because we're in control of the lawsuits. As you see, and I talked about this on the Investor Day, that you could take on the left side two conventional lawsuits that might take three years to conclusion and recycle the capital.
You have an attractive 0.6 return on invested capital and an attractive IRR in the mid-20s. You could, over the same period of time, have six one-year investments, recycling the capital, lower return on invested capital for each investment, 0.23 we've posited here. Similar IRRs on the whole, and over the longer duration, you could even end up, if you recycle it adequately, with a higher return on invested capital. While we are content to have a balance of shorter and longer term resolutions in our core portfolio, we do think, particularly for a public company where we have said repeatedly for the big hits, you never know when they'll come, that having some investments that are likely to resolve in shorter durations to recycle the capital and through attractive IRRs is something that should be part of the portfolio, and we've pursued that with some success.
In fact, if you turn to the next slide 28, you will see the success we've enjoyed for the first five matters in a particular bucket of Complex Strategies that have resolved. Chris mentioned to you earlier that there's a scenario where an investment fund might have a claim. Let's say they owned shares in a company, they were a minority holder, and the majority holder decided to sell the company and take some extra money for a control premium for the majority holder and shortchange shareholders and not do what's in their interest. That shareholder could sue in his own right, but they may have business reasons not to do that. We could finance that claim, and that would be part of our core portfolio.
We found it's attractive for us to just buy the shares and file the suit ourselves, and that's what these five matters reflect. You see that the IRRs have been 24% when we add in. This is a strategy where we use both balance sheet capital and fund capital. The return on invested capital, if you look at how the money is out, so if you look just at the point where the most money was out, was a 20% return on invested capital. This is an area, amazingly, where you can achieve these returns with, as Chris mentioned, a much lower risk of loss. No risk of complete loss, because where we are just financing legal fees, if the case loses, we lose our entire investment.
We're owning the shares because we think they are undervalued, and through the litigation, we're going to increase their value. Even if that litigation doesn't succeed, we still own the shares or compensated for that lower value. The risk-adjusted returns for a strategy like this are quite attractive when you think about the lower risk of loss, but still generating these kinds of IRRs. As I mentioned before, they have a duration advantage that to balance out a portfolio of investments where we have very little control over timing, these tend to have a shorter duration. I would like to say a word about two other things before I pass it off to Elizabeth. If you look at slide 29, we've talked about our Asset Recovery line of business, and it has been a very valuable add-on to our conventional business.
Insofar as when we are underwriting a new matter, it's important for us to look not just at whether it will win, how much money it will win, how long it will take to get there, what it'll cost to get there. Also, if you get to the end, are there assets to recover? If so, will it take time and cost money to do that? It's been an important add-on. You see in 2018, we've had a breakout year where Asset Recovery has contributed to the business's success overall, both in terms of how much money we've put out in commitments, but also in terms of some of those investments coming to produce profitability. We're optimistic about the future.
They will continue to be an important component of our overall business as well as providing a profit source beyond that, because there are lawyers out there who are great at winning judgments and awards, but they are not necessarily as good at figuring out whether you can enforce those, and we can be quite helpful to those clients. Finally, the last thing I want to say on slide 30, which is something Chris alluded to earlier, is I have talked a bit about the importance of diversification. You hear that from me every call, which is we have got diversification in the current portfolio in terms of subject matter, law firms, defendants, jurisdiction, you name it. I also talked about diversification of when we expect those investments to resolve over time. There is a third kind of diversification that I think is important, which is on our sources of capital.
Our assets under management as a fund business have grown to $2.5 billion from $1.7 billion. Some of that is from this new $300 million litigation finance fund we raised in December. Some is from the billion-dollar strategic relationship we have with the Sovereign Wealth Fund, which is unique in the industry, has very attractive terms, and therefore gives us a lower cost of capital than any of our competitors. A nice thing about all this is it produces fee income in addition to the profits we earn from our balance sheet investments. For my purposes, the thing that is really important here is, as Chris and I keep saying, there are a lot of ways to take advantage of market opportunities in litigation risk. There are many different ways we can deploy capital, and those different investments may have different risk-reward profiles.
Having different pools of capital to draw on, the flexibility to draw on those different pools, enables us really to take advantage of those opportunities and to continue to grow and expand and tap new opportunities for investment. I am very pleased with the sources of capital we have, as well as the way we have deployed that capital. With that, I will pass it on to Elizabeth O'Connell, Burford's CFO.
Thanks, Jon. Turning to slide 31. This slide looks at the fair value of our investment portfolio. As a reminder, we hold litigation investments at cost until there is an objective event in the underlying litigation that would cause a change in value either up or down. We wrote in this year's annual report that our valuations have historically undershot our actual recoveries, and that historical track record is one reason we see modest increases over time in the proportion of unrealized gain on our balance sheet. You have seen both of these slides before. They are now just updated for our 2018 results, and they show our continuing conservatism. Turning now to slide 32. We use this slide at our Capital Markets Day, and it lays out two real Burford investments, a win and a loss.
The slide shows how we recognize fair value changes to those investments during their life, both on our balance sheet and in our P&L. I won't belabor the slide as I went through it in some detail at our Capital Markets Day, the important message from this slide is that investments are held at cost until there is some objective event in the litigation that results in us adjusting its fair value either up or down. When we adjust the carrying value Jon, can you hear me? I'm on mute.
I can hear you, someone has music playing in the background. If the operator could please step in and stop that.
Thank you. Just concluding on this slide. Again, the message on the slide is that investments are held at cost until there is some objective event in the litigation that results in us adjusting its fair value either up or down. When we adjust the carrying value on the balance sheet, that adjustment flows through our P&L as unrealized gains or losses. Slide 33 is our cash waterfall chart that we've been including for a couple of periods now. This waterfall shows Burford-only cash moves and excludes any third-party interest cash that appears on our cash flow statement in our consolidated results. The inflows of cash are the black bars on the left of the chart, the outflows of cash are the red bars on the right. There are a few points to draw from this slide.
One is that we had record deployments last year. We deployed $658 million to investments as compared to $424 million in 2017. This is the point that Chris was making about the shift change in deployments this year over last. The second point is we had robust cash generation with $513 million of cash generated from investment recoveries and operations, up from $362 million last year. The third point is we ended the year with $277 million of cash. This is following our $250 million equity raise in October, without which we would have had to have tempered our investment activity, as otherwise we would have been left with too little cash at year-end. Instead, we enter 2019 with cash on the balance sheet to fund investments. I'll run through the next three slides fairly quickly. Slide 34 looks at our operating costs.
Our operating costs in 2018 rose as we added more people to support the growing business to $66 million from $52 million last year. Those costs, which are mostly staff costs, remained consistent as a percentage of income, 16% versus 15% last year, and significantly lower than in earlier years. Over our history, we've continued to balance the desirability of investing in the growth of the business while maintaining prudent levels of spending. Turning to slide 35. This slide's here simply to show the strength of our balance sheet and the growth in the business over the last couple of years. Our investment portfolio has almost tripled over three years to $1.5 billion, and our total net assets have more than doubled to $1.4 billion. We've done this while keeping our debt levels modest. That brings me to slide 36.
While we raised $180 million of debt earlier in 2018, we continued to maintain a modest net debt to equity ratio at the end of 2018 of 0.27 times. Importantly, we have long-dated debt as compared to our assets. The average duration of our debt is more than six years, while the average duration of our concluded portfolio is under two years. Our first bond does not come due for another three years. As I said at our Capital Markets Day, our balance sheet can support more debt, and we may decide to tap the debt market in the future to continue to fuel our growth. With that, I'll turn it back to Chris, who will conclude our presentation, and then we'll open it up for questions.
Thanks, Elizabeth. We try for everyone to make this a little more interesting for you, a little musical interlude in the middle of the financials, a little silence in the middle of Jon's, but we're all back together. I will conclude on slide 37. I really have two things to say about this slide as a jumping-off point. One is you will find for the first time in our annual report, a lengthy discussion about Burford's approach to environmental, social, and governance issues. That's in there in a collected way because investors ask us about it. I think the overarching point that I'd make about ESG is that Burford does not engage in ESG-focused activities because there are now organizations out there scoring us on ESG points. We always have engaged in a significant amount of ESG activity. We are, after all, lawyers.
Lawyers do a whole variety of things around social consciousness and social justice in addition to their business activities. We engage in ESG factors for the sake of the business. It just so happens that they also are able to play a significant and important societal impact. I commend that discussion to you. A real example of that is The Equity Project. The Equity Project is a $50 million initiative that Burford has undertaken to do two things. One is to attempt to make a contribution to closing what is a significant gender gap in law. Law is an interesting industry because it started off—if you look at law schools and if you look at the entry of people into big law firms, you see real gender balance. That gender balance falls away as time passes and as lawyers become more senior.
That's bad from our perspective for the legal industry, and it's also bad for Burford, because we believe that the best way of litigating cases and evaluating them is to have the broadest range of diversity around them as you possibly can, not only gender, but every other kind of diversity, because the reality is that fact finders and adjudicators come from a diverse range of backgrounds. We've adopted The Equity Project to earmark capital that meets our investment criteria specifically for women-led cases. It's just a few months old, and it's been thus far a resounding success. We've already had more than $30 million of pipeline inquiries come in the door specifically because of the presence of The Equity Project.
I'd really commend you to the pages in our annual report, which are also replicated on our website for a discussion of these and other issues. With that, Megan, we are ready for some questions.
Thanks, Christopher. As a reminder, ladies and gentlemen, star followed by one to ask a question. Alternatively, if you are joining us via the web, please click the Request to Speak button. We currently have two questions on the line. Our first today comes from Shahid Rahman, a private investor. Shahid, your line is open. Please go ahead.
Yeah, hi there. Thanks for taking my question. I've been an investor with Burford Capital for a number of years and just wanted to ask you three different questions. The first question relates to the listing. At the moment, you're listed on the AIM Stock Exchange. You're also listed in the U.K. As an investor
My concern is that the U.K. market has been suffering from the Brexit effect where other global investors are shunning the U.K. market. Is there an argument for a listing on another stock exchange or moving away from the AIM listing to one of the more main listing exchanges? That was the first question. Second question relates to in terms of the equity issuance that was done last year. Would you, with hindsight, think the equity was done at a cheap price? If you were to sort of raise equity again, would you consider doing it at a higher price? I mean, given that a number of long-term investors still view this business as very undervalued. The concern is the equity was given away at a fairly cheap valuation. Third question relates to more of a technical question.
Apologies if you already answered it, on aggregate, what is your sort of loss ratio on each of the cases? On average, what proportion of cases would you expect to lose? Thank you so much.
Sure. Thank you for your questions and for your longtime support of Burford. Let me take them in order. We actually wrote in this year's annual report a little bit about listing and markets. The short answer is that while we appreciate the Brexit issues, at the end of the day, it's quite difficult for us to add another listing or to relist elsewhere. It's certainly something that we have considered and talked about with our advisors. The simple reality is that I think right now we have come to the conclusion, and have been advised on this as well, that we're best served where we are. While you didn't specifically ask the question about a migration from AIM to the main market, I'll answer it anyway because lots of other investors ask it regularly.
The answer is that we've come out pretty clearly and said that we're not contemplating that move. I think that frankly, AIM sometimes gets an unnecessarily bad rap. AIM is a growth market, to be sure, for smaller companies, but it also has a significant pool of large companies on it. 41% of AIM's market capitalization are companies with market caps of over GBP 500 million, and more than a quarter of the exchange have market caps over GBP 1 billion. It serves our needs for liquidity, and we think it's actually a good and cost-effective place for shareholders to be listed. On the issue of new equity, I think, look, the reality is Jon and I and lots of other people at Burford are completely aligned with you. We work in the business. We hold a fair bit of the equity.
Collectively, Burford insiders hold 9% or so of the company. Not only that, but we invest a fair bit of cash in our investment funds as well. We're pretty deeply and personally committed to the business. I don't think any of us would come along and say, "Gosh, the business is overvalued." We share your view. On the other hand, to continue to grow and expand, you need capital. We think that relying purely on debt capital is too great a risk, and we think relying purely on private fund capital gives away too much of the return. We like balance in the capital structure as Elizabeth and I both adverted to earlier. Raising some incremental equity, which was the first time we've done that since 2010, felt to us like the right thing to do.
As Elizabeth said, if we hadn't done that, we would have had to curtail our year-end investing activity. I think the reality is that to issue equity, you have to give people a discount, and that's the price of admission, but we're hoping to put that equity to good use. Finally, as to loss ratios, we published them last year, and they vary by type of investment. What we've done this year by giving you line-by-line data is you'll be able to compute whatever approach to losses you'd like. They vary widely. Portfolio losses are low single digits, whereas litigation finance losses are in the double digits. You're compensated for that for risk and return. I'd encourage you to take a look at the new multi-page disclosure that we've put on the website. Thank you again. Megan.
Our next question comes from Trevor Griffiths of N+1 Singer . Trevor, your line's open. You may ask your question.
Thanks. Thank you in particular for the helpful new disclosures you provided this year. I feel it's a little churlish, therefore, to ask you about a couple of things that you told us about last year, which you haven't told us this year. I just wanted to ask about new commitments. Last year you told us that there'd been a very strong start in new business commitments entered into in the first two and a half months of the year against what in 2017 was a rather quiet period. Obviously, you've told us about the underlying trends, but if you can give us any early look at how things have started for 2019, that'd be helpful. The second thing is in relation to unrealized gains, which have remained at a steady but fairly high proportion of total revenues.
Has there been any significant change in the write-down experience? As previously disclosed, I think you'd said before that write-downs in respect of any cases that had ever seen a write-up amounted to only something like 0.2% of the NAV. I just wondered if, as you did the recognizing slightly more in relation to write-ups, whether there was any significant movement in that write-down [audio distortion].
Thanks, Trevor. Trevor and I have known each other for a very long time, I don't feel badly about making a joke at his expense, Trevor, now you're going to ask a bunch of lawyers for disclosure that they didn't give in their written disclosure to give orally on the call. I think we [audio distortion] to have them. The reason last year we gave the sort of first look was because we had been out in the market with some debt issuance, it was important I think people have a more current view of what was going on. I think the disclosure that we've given is all that we're capable of giving unless we actually go and supplement it for everybody in the world. I will comment though, on the fair value point.
Elizabeth made the point, I think it's a very important one. People can carry on about fair value and you may or may not agree with the way that IFRS approaches accounting. In fact, I've made it clear over the years that I don't agree with IFRS, the simple fact of the matter is that we're subject to the accounting rules and, as [audio distortion] a billion-dollar track record of generating 85% returns, it's relatively difficult to simply maintain the level of fair value at a level that is dramatically below that, which is why we've said over years that we've faced pressure to continue to try and equalize those things. Burford's doing that and we resist it. The simple reality is that that's the way that accounting in this works, I don't really think that it's fair to say that the number has ticked up.
We were at 55% of earnings this year and 54% last year, we're a little bit higher, by 1%. In terms of whether things are being written-up or -down more, I think that we certainly would've commented if there had been a sea change in the way that those valuations have been occurring.
Okay. Thanks very much.
Megan, I think we probably have time for one more at least.
Brilliant. Thanks, Christopher. Our next question today comes from Neil Welch of Macquarie. Neil, your line is open. Please go ahead.
Thanks for taking my questions. Chris, I noticed that firstly on slide 23, you've highlighted the duration has moved out from 1.5 - 1.8. I also note the increase in the return on invested capital from, I think 76% - 85%. Is there anything in the year that basically means there was a relatively, a number of cases that were slightly older, which had higher returns in them that other impacted that? Indeed, do you expect the duration to continue to stabilize in around two years or move out at all?
Chris?
I wanted to pick up on was, is there anything else that's developed out in terms of the Hong Kong and Singapore business? I'd be interested in that. Finally, I noticed that you had a number of significant hires that you announced just before these results, actually, and in particular in the origination team. I wonder whether you wish to comment on those on the call. Thank you.
Chris, do you want me to take the first and have you take the second and third?
Sure.
Thanks for the question. I think we said last year when we saw the duration tick down from 1.6 to 1.5, we encouraged people not to read anything into that. As we said, we can't predict what the balance will be between cases that resolve early through settlement, we'll go the duration. When they do go the duration, there could be some changes from one case to the other as to how long they'll go. I expect that the duration is going to bounce around. I wouldn't make predictions that there's going to be an upward or downward trend. We now have a sufficient number of years of experience to see the band in which we'd expect duration to be. I kind of think the same thing on returns on invested capital.
We've said that for things that take a little longer, we end up with a higher return on invested capital. If they're shorter, it'll be a lower return on invested capital, and we're content to have that band move around as long as we're maintaining attractive risk-adjusted returns, which we think we are. I guess the answer is I wouldn't read anything into a bounce from one year to the other. I would look at the longer-term trend instead. Neil, on your other questions, Hong Kong and Singapore is fascinating. Singapore, we have an office there, and Singapore's been open for business for a little while now. We did the very first financed arbitration that was ever done there, as far as we know. We've continued to do business in Asia, as you can see from the geographic distribution chart.
It's going to be, as we've always said, a slow road. The reason for that is that we've got a region that has a demand for capital but has never, ever used it. It's not just that they haven't had exposure to litigation finance, it's that there has been no legal way to pay lawyers other than by the hour. Even things like CFAs and DBAs that exist in the U.K. don't exist there. So I think it's a long-term play as opposed to a short-term play. The thing that has been quite interesting is that we've probably done more business now in Asia for Asian clients in other markets than we have in Asian litigation finance.
In other words, we'll have a client from an Asian country that will take financing from us to pursue a piece of litigation in the U.S., and we're putting more money to work there than we are in regional litigation that's going on in Asia. We'll see where that goes over time. We've doubled down to some extent on our presence in that region with the opening of an office in Sydney as well this year. As to new hires, absolutely. The new hires fundamentally split into three categories. The first is just people that we need to continue to maintain a growing business, incremental finance staff, and legal staff, and so on.
The other two categories, one are, as we've noted, we've made a real investment in origination and business development staffing so that we are not just relying on our marketing and our relationships, but we actually have a significant team of people out into the market performing what I've analogized in the annual report to a sort of a coverage investment banker style function. The third component is simply continuing to expand what we call our underwriting team, the people who review investments as they come in the door and also manage them after they're made. That's simply a function of the fact that the business has continued to grow significantly. I note that we're already at three minutes past the hour. We certainly don't want to keep you overtime. I realize that we also ran on for a fairly long time.
If there are other questions in the queue, I'm happy to take another one if there is, or we may have already lost people.
Our next question today comes from Daniel Lasry of Engadine Partners. Daniel, your line is open. Please go ahead.
Hi, everyone. Three questions from me. I'll make it quick. Chris, you've mentioned before you've kept quite an extensive database on a lot of the items you've passed on, all the opportunities. Can you just give us an idea of what the data tells you with the benefit of hindsight? Second question is, in the annual report, discussing the addressable market, you write, and I quote, "Each area dwarfs the supply of capital available." One of your unlisted peers have said one of their biggest concerns for the industry is that demand for litigation finance is greatly outstripping supply currently. How much do you keep that in the back of your head when you're trying to grow the business, grow the industry, and you consider pricing? Final question is on the new initiatives. It's been growing quite fast, maybe under the radar.
Can you help us understand how hard you've been pushing this? Is it mostly incoming? Because we're just trying to understand the potential for this over the long term. Thanks.
Jon, would you like to take the middle question, the pricing question, and then I'll do the other two?
Sure. My feeling about pricing is we don't consider this to be a commodity product. The people who come back to us, the law firms realize we add more value than simply our capital. We help them, particularly for portfolios, figure out what the right billing arrangements are that meet their clients' needs and increase the profitability of the firm. Or if it's a corporate client we're doing a portfolio with, what sort of arrangements to negotiate with their lawyers in taking our capital. We've not seen a change in pricing. In fact, your question suggests others seem to agree that the demand for litigation finance capital outstrips the supply. We think there's ample room in the market for all the capital that's there, and then some, as we continue to see the demand grow. I'm glad you asked the question.
I'm glad you asked it the way you did. I think it reflects the fact that this is a growing industry with lots of opportunities.
On the other two questions, new initiatives. New initiatives is fundamentally right now our asset recovery business. That's a business that we've talked about for the last few years. We've fundamentally been migrating that business. That business has a good market position. It started life with us as predominantly a fee-for-service business, where we would provide professional services on a time or time-related basis to clients. We concluded after watching the success of that business for a while, that we thought we could make more money by taking risk in it.
While we still provide the fee-for-service business, we've certainly amped up the risk-taking part of the business as well, and we're pleased with the early results, not only in the kinds of returns that we've been able to get from the things that have done well, but also in the demand for capital. I think we'll continue to watch that business and see how it's able to do, and we'll continue to provide capital and other resources to it. Finally, we're big fans of data. We have what we think is the largest proprietary data set in the industry. As you say, it covers thousands of cases that we've looked at and not done anything with. We make extensive use of that data in our own analysis alongside public data and predictive analytics, to come to views about litigation investments.
We actually have a team of people who are dedicated just to that function. Non-lawyers who are an integral part of the investment process, and who engage in probabilistic modeling and other analysis of our investment portfolio based on a combination of qualitative and quantitative factors, including that big data store. We make active use of it, and as technology continues, as AI continues to improve, we intend to make still more use of it. With that, since we've now overrun by eight minutes, I'm going to thank everybody very much for their time. To the extent that we didn't get to your question, I apologize. We're certainly available offline to interact with you, as we always are. Once again, thank you for your time today, and thanks again for your interest in and support of Burford.
Thanks, everyone.
This concludes today's call. Thank you for joining. You may now disconnect your line. Have a lovely day.