Good morning, good afternoon, and welcome to the Burford Capital Interim Results 2018 Conference Call. My name is Tyler, and I'll be the coordinator for today's conference. I would now like to hand over to your host, Chris Bogart to begin.
Thanks very much, Tyler, and welcome everybody. Good morning to those in the U. S. And good afternoon to those in the U. K.
And Europe. Thank you all for taking a few minutes today to listen to Burford talk about its interim results. We're going to follow our usual format. I will lead off John Malo, the Chief Investment Officer and Burford's Co Founder will about the investment portfolio and our progress. Elizabeth O'Connell, the CFO will round out the slides and then we'll open the line for your questions.
We're obviously pleased to be putting up another set of record breaking results. I'm going to use the slides that are up on the website, and we'll tell you where we are as we go through them. So on Slide 2, the highlights page, what you see there on a single page is a number of key financial metrics for us. And I think before we touch on them individually, I think the key point overall here is when you look at the business and you compare its 2016 to its 2017 performance, you obviously saw explosive growth from 2016 to 2017. And I think the question business and the market really have turned the corner.
And we have seen litigation finance and the provision of capital to the legal sector move considerably more into the mainstream. And what I think that the first half twenty eighteen results show across the board is that 2017 was not an anomaly, that the use of capital in the legal industry has become more prevalent. And the Burford has been able, based on its market leading position, has been able to ride that wave. You see that obviously in the new business that we're writing. For the first time, we wrote more than $500,000,000 of new business in the first half, which historically has been our slower half of the year, simply because the law world tends to tip later in the year as clients and as lawyers both consider the financial ramifications of their litigation as the year goes on.
And not only did we write that level of new investment commitments, but we deployed around $400,000,000 in investment activity just in the first half, which is obviously a significant amount of activity. As you know, income and profit for us are really historical measures because they reflect the performance of investment decisions that we made some time ago. Our income rose to a new record $205,000,000 I'd point out that 65% of that in this particular period took the form of realized gains. I point that out because we're asked about that issue from time to time and John is going to talk to it a little bit more later. But it's also worth noting that we don't manage to that number.
Number nor frankly pay particular attention to And so we neither manage to that number nor frankly pay particular attention to it. But it's something that I know investors have asked about from time to time. And so we're certainly supplying some more information about it. Along with that growth in income came a corresponding growth in profits. I draw particular attention to the fact that we generated an awful lot of free cash in the period, dollars 299,000,000 cash receipts, that's a 61% increase.
And we have consistent with our practice suggested that we'll pay an interim dividend at the rate of 1 third of last year's final dividend. So that represents a 20% increase year over year in the interim dividend. And finally on this page, you noticed not only all of these nice income and profit numbers, but a real increase in our total assets. And the reason that's significant for us is that it's those assets, which are fundamentally investments, that sort of prime the pump for future generation of income and profits. Turning to Slide 3.
This really is more for new investors when we're talking to people who are currently Burford investors. And I'm not going to dwell on that page. But I am going to note that Burford isn't alone in this industry. Burford came into existence at about the same time as a number of our competitors. And what has happened over the last 8 or 9 years is that we have simply grown well past those competitors.
We are clearly the market leader. There's some statistics in the interim report that quote a recent analyst report that not only is quite bullish market growth generally, but suggests that our share of that market is somewhere in the 55% to 60% range. So what we have been able to do over Burford's life is not merely on a standalone basis produce some desirable financial results, but we've also managed to effectively outgrow and outcompete the competitive universe, including a number of competitors who came into being right around the same time that we did. Slide 4 really is an effort to capture some data points for you around what's going on in the broader market. We introduced the idea of looking at the volume of coverage in the legal trade press of the concept of litigation finance.
And we did that because 2017 seemed to us to represent a sea change. We had as much media coverage of litigation finance in 2017 as we did in a number of prior years combined. And what has been most striking is that, that trend has really continued in 2018. Just in the first half of twenty eighteen, we've seen about as much coverage in the trade press as we did in all of 2017. So that's a really steep trajectory and it's suggestive of what this graph shows at the bottom of the page, which is also some data from our market research surveys, which show that a very significant majority of lawyers and of survey responders agree that litigation finance is growing and increasingly important.
And it's not only the people who have used litigation finance who are saying that, close to 90% of them believe that, but the people who have not. So more than 3 quarters of the legal industry surveyed, suggests that litigation finance is going to continue to grow. Slide 5 is a new data point. And the reason that we've put this in here is it shows the significance of our single case offering. When you think about Burford's growth, a significant amount of our business today comes from large transactions, especially portfolio transactions.
And you'd be tempted to wonder whether given that now our average investment size is really quite large, it was $24,000,000 per average investment at year end, whether it makes sense for Burford still to do the $2,000,000 $3,000,000 investments that we do. And this slide really answers that question because it shows that that single case entry point is how we get clients in the door in the 1st place. That lawyers are coming to us because their business is being disrupted by their clients and we're providing the solution for that disruption. But what we then find is that a significant number of those lawyers after working with us once, want to keep on making use of the incremental flexibility that access to capital gives them in their practices. And so 75% of the law firms that we've done one single case with have actually come back with more investment opportunities for us, 40% of which turn into portfolio deals.
So it's important from our perspective to be a broad player, a scale player in this industry as opposed to simply being simply operating just at the very large dollar high end of it. With that, I'll turn to Slide 6, which is historical we've done this now three times this bucketizing or categorizing of our commitments. And it lets us talk in more granular detail about what's going on in the business. And I'm about to hand this over to John to do that. On my way to doing that, I just note that the real core of the business, what we think of as sort of traditional litigation finance, is represented by the first two categories there, single case finance and portfolio finance, whereas the other things are newer and more capable of ebbing and flowing.
And in those first two categories, you'll note that we basically doubled our new business volume period over period. And with that, John Malo.
Thanks, Chris. Thanks to all of you for joining us and to our investors who are having invested your capital with us and put your faith in us. And thanks especially to the members of the Burford team who are on the call. As Chris points out, the growth in the business, both more than $500,000,000 out in the first half of twenty eighteen in commitments. But the robust growth in our core business, the single case finance and portfolio finance, it's I really have to attribute that to the team we have built.
We've got a team of people who were excellent lawyers before they came to Burford. They came from top law schools and then top law firms, often top in house legal positions. But they are also investors, people who can look at a legal risk and see how view it as a financial asset and how we can make money off it. And on top of that, they just have a sense of law practice of what makes lawyers and law firms tick. And not only is it a good working team where I wake up every morning so happy to work with this team, but I think all of our clients and counterparties feel the same way.
And that helps explain the statistic Chris talked about that the people who do business with us once come back for more. And, I think that our team makes law firms want to work with us. And so I'd say a big chunk of our success this half year period and since inception is just that we've built an incredible team that is able to see opportunities, capitalize on them and make people want to come back for more. The other piece, I would say, is just as Chris pointed out, the market demand is there that we're not despite Chris saying it's true, there were some other competitors at the time and we've just outstripped them. It's not just that we're trying to do something people have done for years and try to do it a little bit better.
The capital markets have by and large ignored the market for legal services until our inception. And there has been a thirst for outside capital to make law firms more competitive and meet the needs of their clients. And so when you combine the market demand with a team of lawyer investors who are able to capitalize on their market demand, that really is the key to our success. So when I look at this portfolio, the deals we have done, we've had great opportunities. We've been able to negotiate great deals.
It's just a it's a wonderful portfolio we've built here and I'm very optimistic both about how the portfolio will perform and about our continued trajectory. As Chris said, the last three categories, recourse, finance, legal risk management and asset recovery could ebb and flow. I'll say a little more about asset recovery because there are some interesting things to note there. But we have always, as we have expanded into new adjacent areas, refused to take our eye off the ball and the team has been very focused on continuing to seek out, take in, evaluate and make investments in these core single and portfolio finance opportunities. Turning to Slide 7, that really is the result of that hard work.
When you look at our portfolio, the bullets on the left side just emphasize how diverse the portfolio is. It's a very large number of claims across a large number of investments in multiple jurisdictions, multiple subject matters, multiple law firms. And that has always been our approach to litigation, build a great team in house and build a diverse portfolio. That wasn't how some of those competitors that we started out against worked, but that has been our mantra from the beginning and it has produced a portfolio that I'm very proud of and very pleased with. The bullets on the right side are a little more of that detail that Chris explained I would touch upon.
It's not something we attach very much importance to. As Chris said, whether gain ends up being taken at the moment of a realization event when the investment is terminated, we get paid our cash or some gain gets taken along the way because the accountancy, there's been a material event in the litigation that makes our investment more valuable that we don't manage to that. We don't attach that much importance to it, but we know some investors do. And so it is worth pointing out that 65% of our investment income historically has not been recognized until the investments concluded. And we have a further metric.
The chart on the right at the bottom is not something we have put together and released before, but it's to show you that of the 35% that we take in unrealized gains prior to the termination of the investment. The bulk of that comes very late in the investment cycle. So this is a cumulative chart, meaning that if you looked at things that are 4 years to conclusion, only 4% of any gains would have been taken back that far. If it was 3 years, 7%, so an additional 3% because it's cumulative. If it were 2 years before conclusion, you'd be up to 12% and then it's only in the last year that the remaining 23% would be taken, you'd be up to 35%.
And then it's only on conclusion that 65% would be taken above that. Again, those numbers could vary. That's this is the average across the whole this is across whole portfolio and we don't attach much importance. But I think it's helpful to investors who need more transparency to understand the underlying value of our portfolio and the sources of our income. So turning to Slides 89.
I'll say a word about the Petersen matter. I don't want to dwell too much on it because it's just one investment among many, but given that investors have paid attention to it, given it's public and sizable, it's worth noting. And the event that has occurred in Petersen occurred after our June 30 books closed. There was a decision on July 10. So those are not reflected in our numbers, but we had a positive decision from the U.
S. Court of Appeals for the 2nd Circuit. You may recall that Peterson sued Argentina and YPF in U. S. Federal Court for the Southern District of New York, that's the trial court level, for contract breach.
Basically, when Argentina and YPF had decided to do an initial public offering of YPF shares for public market investors on the New York Stock Exchange in various global markets. They had included in the bylaws a contractual promise to shareholders that if Argentina ever reacquired control of the company, it would make a tender offer and buy out the minority shareholders at a formulaic price. That was a contractual promise in order to induce people to invest in a company, which was supposed to be a private concern and didn't want to be minority investors if there was a state run oil company. That contract then was breached. Argentina did reacquire control and did not affect the tender offer and so Peterson seared for You will recall that Argentina and YPF had moved to dismiss under the Foreign Sovereign Immunities Act basically arguing that this was a sovereign act of Argentina, not a commercial one and was a basic commercial obligation in a suit for contract breach.
And YIPF in Argentina appealed to the U. S. Court of Appeals in the 2nd Circuit. That court affirmed the trial judge's decision that this was commercial activity and it's a suit for a contract breach, not for any sovereign activity. And that means the case goes back to the trial court to proceed so that Peterson can litigate its contract claims.
There is the possibility that the defendants will seek further review. There's an en banc review by the entire 2nd Circuit Appellate Court or the U. S. Supreme Court, but those are discretionary appeals and they're rarely granted, and don't give us much concern. So that's a positive development post June 30.
The other thing I'll mention on Slide 9, which we're reporting is that the next largest shareholder of YPF at the time was Eden Park, the large New York based investment fund. We had provided litigation finance to Eden Park in connection with its claim against YTF and Argentina, which is analogous to Peterson's claim. Eden Park is now in the process of unwinding. It's not investing outside capital anymore. And so we agreed in June to take on a broader role.
Basically, they'll still be Eden Park Management or at some point, if everything else is sold off, they'll be a trustee for Eden Park that will still be overseeing the matter for Eden Park to make sure Eden Park investors end up with their due. But Burford has provided additional financing in exchange for a further percentage of proceeds because of course when you're dissolving an investment fund, it's important to get cash to your investors sooner rather than later. As a prudent risk and cash management matter, we decided that in order to finance in order to make this additional investment in an analogous claim, Eden Park's claim against YPF, It was prudent to sell a very small portion of our Peterson entitlement. There's now a robust market in the Peterson claim. And so we sold a small portion in order to cover the cost of the additional investment at Eaton Park.
And that additional sale of Petersen came at a higher implied evaluation of $800,000,000 for the Petersen entitlement. I think that pretty much is enough to say about Petersen and Eden Park. I don't want to dwell too much on it. If you turn to Slide 10, I would just point out, I mentioned before that the thing we're really pleased with is, as Chris said, people wondered after 2017, would you really be able to continue to grow the business and the core business has grown beyond the 2017 performance in the first half. And then we've been very pleased with the single case finance and portfolio finance.
The 2 other areas I wanted to mention, asset recovery and insurance. So asset recovery, we have really shifted from a business model of providing fee for services to providing capital at risk as well as services at risk. So it's not surprising that people that have won large judgments against solvent defendants, and think they've been through the battle. They've spent 1,000,000 of dollars to achieve those judgments. They're entitled to still more 1,000,000 in cash.
And then they confront a recalcitrant defendant who refuses to pay. It's not surprising there would be frustration there and that the willingness to invest additional 1,000,000 to enforce the judgment, track down assets around the world and freeze them, often the claimants do not have that willingness. And so they have come to us both to provide because of our know how and expertise and the team we've developed that's able to track down assets and freeze assets in various jurisdictions around the globe, but also because we're willing to put investment capital behind that. So we can provide the services at risk on a contingent type fee. And on top of that, we can provide monetization of judgments.
So that has that business has grown in the last period and we because we're not only identifying assets, but also freezing them, there's an internal legal function that's needed there and we've established a wholly owned law firm, Burford Law, which provides support for the asset recovery business. Finally, on insurance, there's not much to say. Our historical But we have created But we have created a new Burford insurer to facilitate our litigation finance business. We found there were circumstances where there were good cases in need of litigation finance. And the only way they could go forward is not just if the affirmative claim was financed, but also if there was insurance available to cover adverse costs.
And so we set up an insurer to cover that and reinsurance facility to pass along some of the risks. So we think this is something that helps facilitate the growth of our litigation finance business. And with that, I will turn it over to Burford's CFO, Elizabeth O'Connell to take it from here.
Thanks, John. Turning to Slide 11, as to Burford's investment funds, we've provided a few data points to show that the existing funds continue to generate performance. This is including a significant trial win in Partners III and some further concluded investments in the strategic values fund. However, the larger fund management news is that the overall pace of growth in the business has been such that Partners 3 is fully committed. And while there is some room for incremental investing by recycling in the fund, we expect to be in the fundraising market again this year.
Turning now to Slide 12, we recently started to include this cash waterfall chart in our presentations to try to make it easier for you to see the levers on our cash. And just so it's clear, this chart only includes cash moves on Burford's own balance sheet. It does not include any cash moves from 3rd party interest in our consolidated funds. As Chris already said, cash generation across the business has been robust. And what you see from this chart is that in this period that cash generated from the business, the $299,000,000 more than covered our deployments, operating expenses and our financing costs.
However, while the business was self financing in the first half, we certainly cannot count on that happening reliably, especially given the growth we've been experiencing. And that's why we raised $180,000,000 of debt in late January. This capital raising followed a robust period of new business writing leading up to the end of last year and it ensured we had cash on hand to not only meet current commitments, but also to fund continued new business. As followers of Burford, you know that we are unable to forecast either the timing or quantum of cash receipts. And so the debt capital raise was prudent from a cash management perspective.
And this leads into the points on Slide 13. Over the last 4 years to fund our growth, we've been supplementing our internal cash generation and our development of a secondary market with some long term low cost debt. Our average life on that debt is 6.9 years compared to Burford's investments that have a duration in and around 2 years. Our debt has a weighted average interest rate below 6%. There's no question that low cost long term debt is a cost effective way of financing growth for our equity holders.
We continue to have capacity on our balance sheet to take on further debt given our net debt to equity ratio of 0.39 times and our significant coverage of interest expense. But as I said at year end, we're also not interested in running a highly leveraged strategy. And thus, we continue to look broadly at other sources of capital, including our 3rd party investment funds as a way of meeting continued strong growth in demand for the capital for capital that we're seeing in the legal markets. And that concludes our formal presentation. And I'll hand the baton back to Chris, who will open it up for questions.
Thanks very much. And Tyler, we are ready for
Your first question today comes from Julian Roberts of Jefferies.
I think this is one for Elizabeth, and it's just one from sort of the back of the report. We see that fund investments are up 8% in right at the back in Note 14, but the adjustments and eliminations to that are only up a small amount. Can you tell me why that is?
Julien, I'll have to look and see what you're talking about. I'm not sure I'm following your question.
Okay. Sorry, I'll send it by email.
Okay. Thanks, Julien.
And the next question comes from Trevor Griffiths from Nplusone Singer. Trevor, please go ahead.
Yes, good morning. Two quick questions. The trade press has recently been full of articles about a pay war at the associates level in big law firms. And as I understand, this is typically the talent pool in which you hunt for recruits and growing the team. So I wondered if this has implications for your ability to hire or indeed existing operating cost base?
And the second question is in relation to the Eaten Park claim against Argentina. Is it possible that this claim can somehow, if it is effectively the same as Peterson, to somehow be combined or heard at the same time by the same judge to streamline things?
Thanks, Trevor. So on the associates salary point, the trade press I have to say, so just taking a step back, the way that law firms tend to deal with associate salaries is almost in a sheep like way. There are a few firms that tend to stake out a public position early, and then a whole lot of other firms feel pressure to match those salaries. And the result of that has there's no question that the result of that has been to cause continuing compensation increases for especially for young associates coming right out of law school. We're not recruiting from that population.
And I think the reason you see so much trade press coverage of it is because clients are up in arms about whether a 1st year associate, in other words, somebody who is a brand new graduate from law school, can possibly add enough value to a matter to support compensation, which in New York is now peaking around $200,000 for that person. Unfortunately for law firm associates, that doesn't last. And so you don't actually see a linear approach to legal services compensation. And by the time we're hiring people out of law firms, they are in they will have done a number of years of work and compensation starts to reflect ability instead of merely longevity from law school. So we haven't seen any impact on our own hiring.
What I will say about Burford is that we appear to be a very popular place to work among lawyers. And I think the reason for that is, you get, as John was saying earlier, you get many of the intellectual benefits of being a practicing litigator. And you don't have some of the particularly pernicious lifestyle disadvantages. So we continue to have a robust pool of people seeking to come and work at Burford. As to your Peterson question, I'm going to pump that to John.
Sure. I'm happy to take that. The only thing I'd add on the litigation associate salary raises, I think, more significant than its impact on how much we pay to recruit people, which I should would echo Chris' observations, is that it just highlights the cost pressures on law firms and the dissatisfaction of clients with how much they charge and therefore reinforces the demand for our capital that there has to be another way to provide legal services, a different arrangement from the hourly fee. On the Eden Park matter, your question is a good one. In fact, the cases are before the same judge, Judge Preska, who issued the original decision in Petersen.
And Judge Preska had stayed the Eden Park case while the Second Circuit was considering the appeal from her decision in Petersen. She said we might as well wait and get the resolution of both. So I would be optimistic that the two cases would move along at similar paces on similar tracks given that they involve the same issues.
Okay. Thanks very much.
We may have exhausted the curiosity of the audience. While we just give one more minute to see if anyone else has a question that they'd like to pose, I think I'd make a final point about Burford, which we've made over the years and I just echo it again here, which is we're obviously thrilled with how the business has grown and performed. And we're especially pleased to deliver these kinds of results. But at the same time, we do just continue to remind investors that from our perspective, this is a long term play based on a widely diversified portfolio. And as both Elizabeth and John have already mentioned, it's extremely difficult for us to predict on a quarter by quarter, period by period basis when a court is going to rule and exactly how it's going to rule.
And so despite the fact that we've had many periods of desirable earnings here, there remains always the risk in this business of period to period volatility. Over the years. But I do think it's important for investors to understand the nature of the litigation process. Trevor's question to John really reflects that. That's John's answer is our best supposition of what's going to happen.
But ultimately, we are bystanders in a complicated process that has defied predictability over time. Tyler, did anyone, while I was riffing, come up with one final question or shall we call it a day?
We do have additional questions. Your first one comes from Emmanuel Figueroa from LVV Asset Management. Please go ahead.
Hello. Just to use really the opportunity, if you can just give us a little bit of color or any KPIs you would like to share on the development your asset management business with 3rd party funds? And any plans you could share? Thank you.
Sure. So we think about the asset management business possibly in a somewhat different way than lots of 3rd party fund managers or 3rd party asset managers. And the reason for that is twofold. One is we look at the asset management business simply as another leg in our capital stool. And And so if you think back about Burford's origins, Burford was a purely public player originally.
And so the first thing that we did is raised equity capital and we invested that equity capital and we reinvested its proceeds. And that's all we did as a capital structure matter for pretty much the 1st 5 years of our existence. It wasn't until 2014 that we first went to the debt markets. And we started issuing debt because we were seeing growth that exceeded our ability to self finance just from that initial pool of equity. And so we started raising pretty much annually, we started raising debt.
But by the time we got to 2016, it was clear to us that the market was growing and Burford's presence in the market was growing faster than our ability simply to finance all of the opportunity that we saw on our own balance sheet just with the opportunity that we saw on our own balance sheet just with the combination of equity, debt, recycled capital and our burgeoning efforts to create a secondary market. And so at that point, we decided that we would also tap the 3rd party funds market. And so we did that by acquisition originally, and now we've been doing that organically. We've been adding new funds to the fund manager that we acquired. When we think about that capital, what we're doing, as I said, is really making sure that we have broad access to sources of capital.
And the economics for us around the fund management business really flow from performance fees as opposed to from management fees. So lots of asset managers, are just asset managers, as you know. And really what they're in the business of doing is trying to build up an enormous pool of assets under management so that they can clip management fee coupons. And that's the primary driver of their business with performance fees either not coming at all or really coming as an afterthought. With litigation finance, the return profile of the underlying assets is such that even if the funds collectively do significantly less well than Burford's balance sheet, the value of the performance fee potential in those funds considerably outstrips the value of management fees.
And so while the performance fees are more unpredictable, consistent with my comments a moment ago about predictability, that's really what we're looking to unlock here. And so we view the funds today, as I said, as a source of capital and as a future source of performance fees. Tyler, anything else for us today?
We do. The next question comes from Daniel Lazari from Engadine. Daniel, please go ahead.
Hi, everyone. Thank you very much for taking my question. Could you talk a bit more about the Asset Recovery business? Just looking at it this half, and I think you just changed your fee structure. You've had more commitments this half in Asset Recovery than Single Case Finance.
So what kind of potential do you see for this business rolling this forward 2, 3 years down the line? And do you expect to have a similar return profile in the asset recovery business and duration profile as you have in the post settlement fund? Thank you.
So as John said, when he was talking about the 5 bucket chart that we had, The first two buckets are really the core litigation finance business, single case and portfolio finance. And the latter three buckets are newer. And we are we have a greater expectation that those will wax and wane on a period by period basis. So what we've done in Asset Recovery, as you said in your question, Daniel, we've shifted the business model. So when we started into Asset Recovery a law firm or a corporate client who had already secured a judgment.
You were having difficulty collecting on that judgment because the defendant, the debtor had moved the assets around or they had been in a jurisdiction that was difficult to enforce against. And so our professional team would come along and both do the investigative work, the research to locate assets in a place that we believed we could get to them And then would assist in developing the often the multi jurisdictional strategies to go and do that. And we really operated that almost as a law firm, almost as an adjunct to what the law firms were doing. And we tended to charge for our time to do that. There were 2 things that weren't terrific about that model.
One is the clients had already spent a lot of money and were not all that enthusiastic about paying yet more to try and recover on this case that they had won. And the other is that we could see that we were contributing a lot of value to the process and not necessarily getting paid commensurate with the value that we were contributing. And so we started to test the idea of doing this on risk instead, effectively putting the fee portion of the business at risk in exchange for a payment out of the recovery and also sometimes to put capital at risk either to pay other service providers or even to take a small interest in the underlying judgment. And that was as you can see the deployment from the commitment numbers in the first half, we really have made that business shift now. In terms of predicting the future, I think we're not at a stage in that business to be able to do that, either as to volume of incremental capital or in terms of what we think the duration profile looks like.
Although you compared it to the post settlement fund. And I think it probably is inevitable that the duration profile would be longer in the asset recovery process than in the traditional American post settlement fund.
Perfect. And just another question on another subject. I think you've hired around 10 people this half or somewhere around there over the last few months. Can you just talk about if this is to reinforce a specific area or to have more of a geographical coverage?
So our hiring in the business is really across the field. So we've obviously seen very significant growth in the investment in the of those investments and also in the underwriting and diligence of new investments just given the volumes that we're seeing. We are also continuing to ramp up our marketing and origination activities. We some of you may have noticed a pair of significant new hires in that area just recently. We hired David Perla, who most recently was the President of Bloomberg Law, and Greg MacPolen, a long time colleague of his, to come in and take what was already a market leading marketing and origination platform and take it to the next level as the business continues to grow.
And that's not only a domestic U. S. Effort, but it's really a global effort. We now have a significant London presence and from London and now from our office in Singapore, we are branching to many different jurisdictions.
Okay, Chris. We have one more question on the phone line. It's from Russell Wynne of Canaccord. Russell, please go ahead.
Thanks very much, Chris, and congratulations on a good set of figures. I really wanted to ask something you touched on just now about the unpredictability of your figures going forward. When you put out your statement regarding Petersen a few weeks ago, there was a sort of an addition there saying how if your estimates differed from you weren't guaranteeing analyst estimates and if your thoughts on it varied significantly from them, you wouldn't sort of tell the market. How do you sort of square that with the obligation with the stock exchange to prevent a false market in your shares if your expectations of figures do differ widely from the market expectations?
So I guess we put ourselves in what I think is pretty good company with Warren Buffett and Jamie Dimon, who wrote a piece not very long ago in the Wall Street Journal, calling on companies not to give earnings guidance to the market. We don't do it as a matter of philosophy, we do it as a matter of practicality. So the reality of our business and you referred to the Peterson release, but the language in that release is not new. We've said that throughout our history to the market and we've said that very language in the Petersen release has appeared in our annual reports and in other press releases. But what we've said to the market is that our job is to, as John said earlier, to do the best we can to compile a terrific portfolio of investments.
We are effectively a buy and hold investor in those investments. Litigation is its own process and we have no ability to control its timing or its duration or frankly predict them. And just to put a fine point on that, the appellate court in Petersen released its decision on the 10th July. That was in a case that was argued before it on the 15th June 2017, so about 13 months earlier. That decision could have come out at any time after the oral argument.
It could have come out the very next day and it could we could still be waiting another year for it. So we have no visibility into when that decision would be released. And we found out about the release of the decision by it arriving by email to our lawyers. There was no advance warning of it. And there's no predictability of when it's going to occur.
And so based on that, we're not in a position to be able to give guidance or predict what our earnings or what our cash flows are going to be. And we've made that very clear to the market. And that in our view is the best that we can do. If investors and analysts find it helpful to try to make their own predictions, that's obviously fine for them to do, but they're doing that without our guidance and without our endorsement. And so that's I think the best that we can offer for this particular industry.
Thank you. I appreciate the unpredictability when courts will actually announce a result. But presumably, if 1 month you get a result that is a major sort of win or whatever, you would announce that then not wait for your result several months later perhaps if it was a substantial effect on your annual profits. So are you saying you wait till your standard reporting timescale?
So we have historically consistent with our obligations, we've historically put out RNS announcements when there has been a material development in the business. And we obviously to do that. You saw us do it do that for example with Petersen on within 12 hours of the result coming out. So absolutely. And that sounds like it is the end of our question period.
So with that, I very much appreciate everyone's time today on this call. We obviously are available for any further questions or follow-up. And as John said at the outset, we're very grateful to all of you for your continuing support of the business and for providing us with your capital. We do our very best to be worthy of that. And we look forward to demonstrating the future potential of what this transforming legal market is capable of providing.
Thank you all very much.