Hello, everyone. Good morning. I'm Josh Wood. I lead investor relations for Burford Capital, and I want to welcome all of you to our 2025 Investor Day. Just a quick note as we start, a quick anecdote. Burford was recently referenced in a CNBC piece on all-weather stocks, and I think that's a good list to be on today. We'll see. We have a great crowd here in New York Live. We appreciate all of you being here on what I know is a tricky day. I know we have many more watching and listening on the webcast around the globe. A warm welcome to all of you as well. A few important things before we get started. Today's presentation will include forward-looking statements, which are subject to certain risks and uncertainties that may cause actual results to differ from what we discuss here today.
You should refer to our latest 10-K filing for more information on those risk factors. We will also refer to certain non-GAAP financial measures during the presentation. Reconciliations to the most comparable GAAP measures are also included in the appendix of our presentation. We have a great agenda for you today. We built it to accomplish two things. First, of course, we want it to be a really comprehensive update for those of you who know us well and who have followed Burford for a long time. Importantly, we also want it to be an immersive introduction to the company for investors who are newer to our story. Ultimately, it is about how we drive shareholder value through the business of law. You can see the agenda here on screen.
You're going to hear not only from our senior leadership team in Christopher Bogart, John, and Jordan Licht, who you know very well from our earnings calls, but you're also going to hear from a larger group of senior professionals who reflect the deep bench of talent that we've built at the firm. A few logistical notes on the day. You'll see that we have two breaks built in. One is in the middle of the program, and another one right before the management Q&A at the end. That last break is where those of you here in person can grab some lunch just outside here. Regarding the Q&A session, we will ask you to please hold all of your questions for that session at the end. We'll get to as many as we possibly can. For those of you on the webcast, you can also participate in the Q&A.
We'd certainly encourage you to do so. You should be able to submit questions through the module that you see on your webcast screen, and we can relay those live here in the room. Again, thank you all for being here. Without further ado, I will turn things over to Christopher Bogart to get us started.
Thanks, Josh Wood , and welcome. We're excited to be able to spend the next several hours sharing with so many of you, both here live and on the webcast, our vision for what a much larger and more valuable Burford can look like five years from now. We're really excited about the opportunities that are present for us in this business, in the business of law. We are superbly positioned to take advantage of those opportunities in a rapidly growing and evolving market that is one of the very largest markets in the world. Here, we've got a management team that is really all in and fully aligned with shareholders at a level that is rare to see in multibillion-dollar public companies. The management team is the largest shareholder of this business. We own 10% or more of the equity.
We have about $300 million or more of equity value at risk. We just bought last month another $18 million of equity. We are excited about this opportunity, and we're all in with you in continuing to pursue it. I'm going to take just a minute to outline what's going to happen today, and then I'm going to start talking about the business. I'm going to talk about where the business is today, where it's going, the opportunities for growth in the core business, and some of the really interesting things that we see coming up. Jonathan Molot, the Chief Investment Officer and my partner and co-founder in this business for 15 years, is going to talk, is going to do a deep dive into the portfolio, talk to you about our data science and our modeling.
We're going to show you two panels of our people, and you have their bios in front of you if you're here in the room or online if you're participating by webcast. Two panels of our senior people, many of whom you haven't been exposed to before as investors, and we think you'll be interested in seeing just the depth and quality of the team that we have put together. One of those people, Craig Arnott , the Deputy Chief Investment Officer, will be coming in by video from London. Unfortunately, his passport was stolen a couple of days ago, and in the current world, that just doesn't work to get into the U.S. From afar, he can run our new trade and tariffs department. You will hear from Travis Lenkner about some interesting, slightly wider opportunities we see for the business.
Jordan Licht will come back and pull it all together and talk about the portfolio economics and how we get to the returns that we're enthusiastic about being able to deliver in this business. We have built a big business here. We started this 15 years ago, and it has grown and grown and grown. That is going to be a key theme of our presentation, how much growth we've already experienced and what the future growth potential of our market and of the legal industry in general pretends. We're going to talk to you about our returns, how we have generated significant returns over the period of our existence, and those returns have been generated on a strong, asymmetric, uncorrelated basis across more than $3 billion of cash that we've brought back, more than, frankly, $5 billion if you throw in our managed funds.
We're going to talk a little bit about YPF. Let me start by giving you a couple of examples of what we actually do. All of what we do is based on the idea that we're a specialty finance firm focused on the business of law, and we're providing capital out there in the market based on the underlying asset value of legal claims, litigation, arbitration, regulatory matters, and trade matters. Here's an example of the basic business, if you will. There's a strong demand out there, especially as litigation volumes continue to increase and as legal costs continue to rise. Today, you've got lawyers charging $3,000 an hour. With that demand, with that dynamic, there is a strong demand for alternative solutions to simply writing checks every month to your law firm. That's a solution that we've been pursuing for the entirety of our business.
It's how we started. Here's one example, which is a global Big Four liquidator, one of the global accounting firms, regularly takes on assignments where they go in, obviously, to insolvencies and run the insolvency for the benefit of creditors. Often, the dynamic there, as in the case of many businesses, is that there's simply not enough cash left in the business to be able to pay legal fees, but there are good claims. The question is, how do you pursue those claims? Here, we did a $10 million deal with this liquidator during COVID, and we helped the liquidator progress the claims, notwithstanding the presence of the pandemic. That's an essential service because the liquidator is not capable, obviously, of reaching into its own pocket to pay the lawyers. In fact, the liquidator can't even take the risk of a bad outcome.
In addition to providing financing, we own and operate a captive insurance company. That insurance company writes adverse costs insurance for those jurisdictions where there is cost shifting if you are unsuccessful in litigation. This is a pretty typical, what I call sometimes litigation finance 101, where we are just stepping in to pay the legal fees. We do it for people who cannot pay their own legal fees, whether they are insolvent or, frankly, whether they are some of you. Some of you sitting here are, in fact, our clients. You may not even know it because people who run investment funds often also do not have capital to be able to go and pursue a claim. You cannot take shareholder money.
You can't take investor money from a fund and say, "Oh, well, let me go and pay millions of dollars to legal fees with that money." You need a different solution to be able to pursue a claim if you've got one. We work with some of the world's largest asset managers. There is also this demand from just plain old corporates who want to keep their capital and use it for something other than collateral litigation expenses. As you can see, when these things go well, as this one did, they can be very profitable. The next level or the next layer of what we do, you can almost call it litigation finance 202, is again with the theme of looking to the underlying asset value of legal claims. Here, what we're doing is we're not paying the legal fees and expenses.
In fact, this is a growth stage company that was in a fight with a big Fortune 100 company. They went all the way through the litigation process without us. They did it entirely on their own. They paid their lawyers. They were successful in getting a very large arbitration award out of this proceeding. It is a growth stage company. It needs cash to continue to do what it does. Of course, the Fortune 100 company knows that and does not pay that arbitration award and instead drags out the litigation process. What can you do if you are the successful recipient of that arbitration award in that instance? You can go and raise another round of financing, dilutive, expensive, or you can come and do a deal with us. We gave this company $100 million right off the bat.
That meant that it didn't need to go and do that next round. The other thing that it did is it showed the Fortune 100 company that they had the resources to go the distance. Instead of folding and having to take a low-ball settlement offer, this company was able to hold out longer, get an appropriate settlement offer from the big company, end the thing, pay us back, and not ever having to dilute their shareholders. As you can see, this is the kind of deal that sometimes will resolve quite quickly. This was only an eight-month or so deal. In those kinds of circumstances, and Jonathan Molot is going to talk more about this later, we will sometimes generate quite desirable IRRs, as you can see that we did here.
Obviously, our capital is not out for that long, and these are not very high-risk transactions sometimes. The aggregate returns on a short-dated piece of business like that are going to be lower. That's absolutely fine with us. We're delighted to do these kinds of deals all day long. Stepping back from those examples, again, we're doing a couple of things here. We're serving litigants of all shapes, sizes, and stripes: law firms, big companies, small companies, asset managers, you name it, when they have a clear economic problem that they're trying to solve. We're serving law firms. We've worked with 94% of the AmLaw 100. Those are the largest law firms around. When we help them be able to take and calibrate the risk that they're going to take in their own portfolios because they all still run an hourly fee business model.
We have both of those client arms, if you will. What do we do? The two things that I just described. We pay legal fees and expenses. We also monetize the underlying value of claims, or we do both in the same transaction. We can do these one case at a time, as you saw in the second example, or we can do them across a portfolio of litigation. When businesses or law firms have a whole bunch of litigation, we can reduce the risk and therefore reduce the cost of capital without changing our net returns, but also getting the benefit often of some cross-collateralization. That is a very attractive market proposition. It is something that we pioneered quite a long time ago, and it is an important dynamic in the overall market. We have grown to be the global leader in this business.
We today have a $7.4 billion global portfolio of these assets. As I said earlier, we've already generated more than $3 billion in cash returns. These numbers here are cash. These aren't fair value accounting numbers. We've generated more than $3 billion in cash returns, more than $5 billion if you look at also the managed funds that we manage. We've done so producing attractive returns. As an equity matter, we've been pleased with our ability to develop the equity story. We started as a pretty small business just listed in London. We've now been listed on the New York Stock Exchange for more than four years. We were added to the Russell last year. Jordan Licht will talk some more about the developments that that listing and our progression to a full U.S., issuer status have created.
Along the way, we've led the market in evolving what we do and what this is all about. Across the top, you see a whole variety of product innovations that we have developed and that are now commonplace in this market. We continue to innovate and evolve every day. Along the bottom, you can see how we've spread the business to become a global instead of just a U.S.-focused business. The U.S., remains our largest market, but there's an awful lot of opportunity out there, as you're going to hear from some of my colleagues who have come in today from Asia and Europe to talk about those opportunities. Turning from that basic overview of who we are and what we do to the all-important question of growth. We've grown an awful lot already in our history.
We raised $130 million when we IPO'd this business in 2009. We've been able to grow that into a $7.4 billion portfolio over 15 years. We believe that we're just getting started. I'll give you some market data down the road that'll show you the enormity of the potential here. When you think about what that growth has achieved and how the business has scaled a little bit, there are some interesting statistics to unpack here. The portfolio has a lot of cases in it. We count assets, and we have, we say, 236 assets, which means basically deals, financing deals. Sometimes that's one case, but sometimes it's a lot of cases, as I talked about with portfolios. In fact, underlying those 236 assets are thousands of individual litigation cases.
That provides a real level of diversification for us to be able to take advantage of. Another real evolution over time has been check size, deal size. When we started, most of the deals that we were doing were those litigation finance 101 deals, where we're paying the fees and expenses. Fifteen years ago, the fees and expenses were cheaper. Our check size when we started was sort of $4, 5, 6, $7 million. Today, we've more than quadrupled that to an average check size of $22 million. That's because, while we still happily do those single-case investments, we also do any number of larger, more significant investments. That's important as well because we gain some operating leverage from doing that. It would be pretty hard to have a $7.5 billion portfolio comprised only of $5 million deals.
As you can see along the bottom of this chart, that's paid off in terms of a continued growth rate of realizations. These are cash numbers. This is the cash that we're bringing back from successful investments and the profits that we're making on those investments. Along the way, we've continued to generate interesting returns. As we grew the business a lot, one of the key questions, frankly, both for us and often asked by you, was, as you grow and scale, can you continue to maintain returns? Or instead, are you going to find yourself in a world where the price of growth is a considerable compression of returns and those returns being competed away to the mean? We said at the time we didn't think that was going to occur for a bunch of reasons that we gave. Sure enough, it has not.
We've been able to show that level of growth while maintaining strong, desirable returns. As Jonathan Molot is going to demonstrate in depth, those returns are particularly attractive because they're asymmetric and they're uncorrelated. Book value has grown along the way. People often ask me about the TAM. Look, I used to be a technology venture capital investor. It's pretty easy to compute TAM for some of the things. You know how many people have phones in their pockets. You know how many people buy the software. You can run some math here. The challenge with this business and with law is that law is an absolutely enormous global industry. Just looking at the money that is spent on legal fees and associated expenses with the legal process, that's $1 trillion a year globally.
Now, that's not all addressable to us, obviously, but it just shows you the enormity of the numbers that we're talking about. That is only the litigation finance 101 part of our business. The litigation finance 202 part of our business is the underlying asset value, not what the lawyers are getting paid, but what the claims are worth. That is a huge market. It is so large that nobody has actually successfully quantified it. It is perfectly clear that you can call it a multi-trillion dollar annual market. If you're curious about how you get to those numbers, there is a bunch of backup in these slides that takes you there. There are even individual components of the market that are multi-trillion dollar. This is an enormous opportunity that we still today are just scratching the surface of.
This business, the issue as we go forward with this business is not about TAM and market size. The issue, frankly, is about adoption. It's about how rapidly we can persuade people, one new client at a time, that this is something very much in their interest to do. That's something we're successful at doing every year. Four of my colleagues are going to come up in a few minutes and tell you just how we do that. What about the future? We've grown this business, as I've shown, pretty significantly.
If we just use this very bare metric, the cash that we have put out the door already and the cash that we have committed in the cases that are actually ongoing to put out in the future, that number has grown already by about a 16% CAGR over the last four or five years. We believe that we can double the size of that number over the next five years. As you look at these curves, you'll see that we don't need that high an annual growth rate to be able to achieve that. We can grow at a slower pace than we've grown historically and still achieve that result. We believe that the addressable market is sufficient to allow us to do that. We believe that the ongoing growth in client demand that we see is sufficient to allow us to do that.
Why do we believe some of this about us? It's fine to say, "Fine, there's a giant market out there," but this is now obviously a hot thing. I was on Bloomberg TV a couple of weeks ago, and the intro, they called this a booming market in a hot space. Why is it that Burford, as opposed to other people in this market, are going to be able to capture that TAM and that demand that we see? I think that there are a number of things in which we have individual structural advantages, moats, to use the invoke term. We're the largest player by a long shot. We basically compete with two kinds of players in the market. We compete with pure-play litigation finance-only firms. Those firms are all dramatically smaller than we are. They simply don't have anything approaching the scale.
That has lots of knock-on consequences in terms of access to people and data and capital. We compete with large multi-strategy asset managers who find this area now attractive as well. They similarly do not have our scale and our proprietary data and our market reach. They are doing this as a way to spike the performance of their credit funds. They are creating a desk or a group of people that look at this stuff, but they do not have the 175 people, the global presence, and the brand recognition. It is not just scale that is important to us, although that is certainly a moat. It is not just that we have the most recognized brand in the industry for doing this. It is not just that we have permanent capital and the lowest cost of capital in the specialty litigation finance business.
It's not just that we have 15 years of proprietary data that we believe nobody else has a data set like that, which is of enormous assistance to us both in new business generation and in making quality investment decisions. Jonathan Molot is going to touch on that some more. It's not only that we have the resources to be able to invest in data science and artificial intelligence in a way that we don't think anyone else is doing in the industry. It's the combination of all of those things. Our moat, our competitive advantage is the combination of all of those individual things. We are uniquely positioned with that combination. What does that actually mean? What do we do here? How do we grow? There are some simple steps. Some of these are in no way unique to Burford or legal finance.
One of them is the most basic. You do more with the clients you already have. We have been successful in that world. We have three-quarters of the law firms that we work with come back for more. We also have people all over the world. This is not a high manufacturing-style business. We can launch in a market with one person. We have people sitting around the world in as many as two dozen cities at any given time. We cover those geographies, and we add new clients in those geographies because we are there. We go out to the social events with lawyers. We meet them. We talk to them. We educate them. The other thing we have done over our history and will continue to do is we add new geographies. We do it moderately.
We do not have to make a giant capital investment to go into a new market. We are not even like an investment bank. I do not need a whole structure of analysts and associates and so on to make something work. I literally can put one person in a market and start to generate new flow from that market. Quentin Pak, in particular, who runs Asia for us, is going to come up and talk to you about just what he has been able to achieve in Asia without that kind of infrastructure. As we talked about earlier, we are going to continue to expand our product offerings. We have a long history of being able to do that, and we will continue to do that. Travis Lenkner is going to touch on where we are headed with that.
When we talk about, excuse me, when we talk about growth, I want to make a couple of data points to you because the evolution of the business has left us with more complexity for you to deal with. That is, from my perspective, a welcome thing because we can generate incremental profit dollars from all of the different things that we're now doing. It does mean that for those of you who have followed this business for a while, the metrics that we use, that we used to use, are not necessarily suitable any longer. It used to be the case that we would talk about commitments and deployments, how much new business have we written and how much cash have we put out the door.
Investors would sort of take those numbers and slap a multiple on them and use that as the vehicle for trying to predict the future when you modeled this business. The answer today is that that is not really a suitable way of looking at this business, and it is not something that we do anymore. We do not track those metrics in that same way internally. The reason, as you can see in the graphic on the left here, is that we have seen a real dispersion in risk-weighted returns. We are doing a lot of different kinds of business today, and we are making different levels of return based on the relative risk. As you can see, and Jon is going to take you through this in more detail, as you can see, that dispersion of returns makes it very difficult to just slap a single number on.
Instead, we've now devoted close to a decade of resource and time into our data science and our proprietary modeling. That's how we manage the business today. We use the output of that modeling. Jon has a long segment to take you through that. What we're going to give you, we gave this to you three years ago, and we're now going to give it to you more regularly. We're going to give the data in the middle of this slide to you every quarter, and we're going to give the data on the right-hand side, the Jon data, at least every year. What that tells you is what's going on in the book. What is our risk assessment, and what is our modeling output?
What that will let you do, in our view, is join us as a management team in looking at the same kind of data that we use when we manage the business. There is a big difference between how much money we put to work in low-risk, low-return investments and how much money we put to work in high-risk, high-return investments. When you look at this through our eyes, we have seen very significant growth over the past. We last gave you these output numbers in the fall of 2021, as of June 2021, at our investor day then. We were projecting modeled realizations from the portfolio of $3.4 billion. That number has grown by more than 30% to $4.5 billion. Jon, again, will take you through what lies behind that.
This is how we look at the business, and this is how we'd encourage you to look at the business going forward. Another dynamic in thinking about returns is the presence, and frankly, growth rates, is the presence of large cases. We did our first $100 million deal in 2015. Since then, we've done 13 of them. They're significant in the business. They make up more than a third of the capital that we've deployed. They have, even though most of them have not yet concluded, already represented more than $1 billion of cash back in. The thing about these large deals, though, is that they don't come like a charm in the third month of every quarter for us to be able to have a nice smooth quarterly progression. In fact, we're not a quarterly-based company at all.
We do not even have quarterly targets for our people. It is too short a period for what we do. We look at the business on an annual basis. Even then, you get variability in the presence of these large deals. In any given year, we will have zero or one or two of them. You have to have a longer-term arc to look at the growth of the business as opposed to looking at it quarter by quarter because one quarter is going to be way up because, hey, we closed one of these big deals. The next quarter is going to be way down because, hey, we did not. In our minds, that is not significant. What is significant is the multi-year progression of this business. What is our focus here? We have talked about growth.
We've talked about our optimism about being able to double the size of that base portfolio in the next five years. We already have a very large portfolio that has significant cash and profit generation potential. Jonathan Molot going to walk you through why we believe that has at least $4.5 billion of realization potential in it and our historical accuracy in being able to project those numbers. All of that, Jordan Licht is going to wrap together for you and talk about why he thinks that takes us, as we've historically said, to an ROE around 20%. That's an ROE number, by the way, that we have hit in a majority of years in the last decade. I made this point at the outset that there's a lot of alignment here between the management team and shareholders.
I'm not going to belabor this point again, except to underline that what that means is that we care a lot about the share price, as do you. We don't care about it necessarily on a daily basis. I can't help the fact that our uncorrelated assets are nevertheless going to take the stock price down a little bit today, given the bloodbath that is going on globally. If you look on a longer-term basis, we have outperformed any index you would care to compare us to on pretty much any duration you'd like to look at, two-year, five-year, ten-year, since inception. We're proud of that record. I just want to leave you with the thought that it's something we care a lot about on a longer-term basis. This isn't a charitable operation. We're looking to make money on the stock just as we make money for you.
That is something that is important to us. It would not be complete for us not to talk a little bit about YPF, but I am only going to talk about it for a little. Jon is going to talk about it a little bit more. I am sure that we will have questions about it, notwithstanding the fact that we remain constrained about what we can say about even a really big asset for us that is in ongoing litigation. I know that there are people who are newer to the story. What we have done in two slides is we have tried to give you, first of all, on this slide, the historical progression of what has happened here and why we have ended up with this very large asset.
We have set out all of the relevant numbers for you to the extent that you want because I know investors cannot control themselves, just like our data science people cannot, to try to model these things, even though this one is particularly difficult to model. We have given you all the data in one place that you can look at and really understand what is going on financially. The bottom line with YPF is that litigation risk remains here. Within the context of that litigation risk, something can always go terribly wrong. In any positive state of the world, in any state of the world with a positive outcome, there is not really a path for there to be something less than a ten-figure outcome for Burford itself.
We're excited by the presence of YPF and what can happen to it over the next couple of years. Finally, Travis Lenkner is going to talk to you a little bit about opportunities that we see to do more. When I was talking to you before about our moats, one of the things I talked about was brand and market position. We have built, by far, the leading firm in the business of law. Before we existed, this concept didn't exist at all. There were simply law firms, and there were service providers, and that was it. There was nobody providing capital to the market in any institutional way, and there was nobody pulling this market together and helping it grow. We have this unique position in the legal ecosystem. We spend hundreds of millions of dollars a year.
We're one of the largest buyers of legal and ancillary services in the world. We have a deep level of knowledge about this stuff, and we plan to take that base of knowledge and do a little bit more with it. We've historically focused just on the law firms, but there are lots of things that go into taking a case to trial. You need an expert witness. You need a trial graphics firm. You need a jury consultant. You need a settlement administrator. You need all of these component pieces that we know and, frankly, pay for today. There are interesting opportunities that Travis is going to unpack for you there, in addition to the opportunity to continue to invest in law firms themselves as that becomes more of what we're capable of doing. I'm grateful for your time and attention. We're excited about this business.
We think we're very well positioned to continue to grow it, to continue to make this a materially more valuable company over time by doing what we've been doing today, but doing more of it in more places, and by widening the aperture a little bit about where we head with it. With that, my partner, Jonathan Molot, to take a deep dive into the portfolio.
Thank you, Christopher Bogart. Thank you all for joining us today. I'm very excited to be here to talk to you about Burford's past, present, and future. I'm going to, as Christopher Bogart promised, go through the portfolio returns to date and show you just how we've been able to achieve what we have achieved, unpacking with a little more granularity the results we've achieved from inception to today and recently.
I'm going to talk about the present that Christopher Bogart mentioned. A bunch of competitive advantages that really do distinguish Burford from others in the space. I'm going to focus in particular on our probabilistic modeling and our proprietary data set, which really do set us apart. I'm going to explain how they help us price to risk, which is very important for our business. I'm going to talk about the portfolio potential. That modeling tells us a great deal about the value of what we have that can deliver returns to you, our shareholders, and us, our shareholders, as Christopher Bogart said, going forward. As Christopher Bogart mentioned, we have delivered over $3 billion, $3.3 billion of realizations on $1.78 billion out, and with attractive returns. The returns on invested capital, the IRRs, they're very attractive.
I will say a big part of that is we're best in class. We're very good at what we do. There is something inherent in the asset class that lends itself to the return profile we've been able to achieve. I have to give some credit to the asset class. I can't take all of the credit. There's basically only three things that can happen when we invest in a litigation. It can go to trial and win. It can go to trial and lose, or we can settle. You see from the numbers, the vast majority of our matters do result in settlements. Those are great. They generate attractive returns. It happens sooner than an adjudication. We're not bearing the binary risk of loss. When things go to trial, you also see we win much more often than we lose.
When we win, we win much bigger than we lose. You can see that 16% of deployed capital goes to adjudication wins. If you run the numbers, that accounts for almost 30% of our realizations because the trial wins are bigger. What that means is this asset class, if done correctly, which I think we do, we do better than anyone, it lends itself to lots of singles and doubles. Those singles and doubles are the sorts of returns that any business would be very happy with. They're enough to make the business profitable after covering costs and losses, and they're great. That's interspersed with the home runs, the truly outsized returns that make this business a truly extraordinary business with very few strikeouts. To have a low loss rate with the potential for that kind of high return, it's a wonderful asset class.
I can break that down with greater granularity by looking at all of our results. Each of those bars represents one of our investments that has concluded and delivered returns. You see on the right, those are matters that have greater than a 200% return on invested capital. For those who speak MOIC, that's better than a triple. On the far left, the black, those are losses. They're fewer, and they're smaller. There's an asymmetry to this return profile because when we lose, we can't lose any more than we invest. When we win, we can win many times what we invest. It's a wonderful thing. The blue and turquoise in the middle, those are the singles and doubles, mostly settlements, but some adjudications that came in slightly lower than the full home run.
The spread of those returns is what makes this such an attractive business. What's really interesting about it is this representation graphically of all of our results to date is not that far off from how a single investment, if you undertake probabilistic modeling, run a Monte Carlo simulation for a single investment that we put on, there are going to be the potential for loss, the potential for home runs, and lots of outcomes in between. The business is set up to deliver. It's not surprising that the portfolio would deliver that because individual investments have the capacity to deliver that range of returns. Now, not everything we put on has that dispersion. When we model it at the beginning, and I'll talk about the modeling a bit, not everything looks just like that. There are some matters that are much higher risk, higher return.
There is a bigger risk of loss and a bigger chance of a big hit. There are other matters that are lower risk, potentially lower return, usually shorter duration. It may be a big matter that is going to deliver attractive returns in the near term without as much risk that we can churn the capital and turn it over. What I want to talk about now is how we price to risk, and we are really good at it. The results show that. Christopher Bogart threw this up here and promised a little more information. I do not think we have shown you this before. The numbers on the left there, the model risk of total loss, that is our quantitative modeling at the outset when we decide whether to make an investment. We measure it on lots of metrics.
It's not as simple as, are you going to win or lose? I remember somebody asking me, like, what's your batting average? It's a much more complicated question than that. This is just one of the metrics in the modeling. What are the chances of a total loss? 0-10, 10-25, over 25. The numbers on the right, those are the actual returns on invested capital we have achieved across that category of cases, including wins and losses. What you see is for the higher risk cases, we made more money. For the lower risk cases, we made less money, but still very attractive returns on invested capital. We didn't take as much risk, and often they're shorter duration. I'll get to that. We have a blend of matters from the high risk to the low risk and in between, and we price to risk.
Without our quantitative modeling, you could never achieve those results. You'd look at a suit at the beginning, and you can offer cookie-cutter pricing for whatever the suit is, no matter how high risk or how low risk. That is not a recipe to maximize returns for you, our shareholders, and us, our shareholders. I want to talk about how that plays out. Someone could say, oh, if you can price to risk, and there are some that are really high return, why don't you just do the highest octane returns on invested capital? It would be an enormous mistake, and it would be leaving a $20 bill on the floor, on the street. Because we see lots of opportunities that are shorter duration, lower risk, that can recycle our capital, bring in returns that we then can reinvest.
One might mistakenly look at a chart like this and say, what happened in 2022 and 2023, Milo? You fell down on the job. You made a bad investment. What did you do? What was wrong? Nothing was wrong. Look on the right. We had a couple of very large, over $100 million deals that generated IRRs that are really quite attractive in a year. We recycle the capital. The ROICs are below our average, so that's going to take down the average. Are you disappointed that we did those deals? By no means. We're thrilled we did those deals. Christopher Bogart mentioned another one, too. Those are just two examples. He mentioned the one where we put out $100 million, got $125 million back in eight months, 40% IRR. Of course, we want a balance.
We want matters that are going to churn capital, producing healthy, robust returns with operational leverage because you're putting out a lot of money with fewer man hours. We also want the high octane swing for the fences matters that can deliver enormous returns in the future. We want both, and we have both. It just naturally comes to us if you understand it and model it properly. It is not just risk that determines return levels. It is also duration and time. This graphic shows you that, not surprisingly, you look at 2024. 2024, that money hasn't been out very long. Not surprisingly, the relatively small portion of the 2024 vintage that has resolved has resolved with very attractive IRRs, but lower returns on invested capital. As you get to more mature vintages, the returns on invested capital go up. That stands to reason.
Remember I explained before, when we go to trial, it takes time, but we win bigger. It also makes sense that when things settle on the eve of trial later in the litigation, they settle for more than when they settle at the outset, right after a motion to dismiss. Because you're closer to trial, people are more scared, and they'll pay more money. Also, you'll hear from Evan Myerson, who runs U.S., commercial underwriting a little bit later, who's going to unpack our pricing. We usually build, in fact, always build duration protection into our deal terms, which means if it goes longer, we want compensation both for the time value of money, but frankly, also for the additional risk we're taking by going through additional stages and hurdles of the litigation. As things are more mature, they can produce more outsized returns.
What does that mean for our portfolio? I've used this slide before for a number of purposes. I love it because it can tell you about the past and the present and the future. Just to start, I want to unpack. If you look at the checked box and you look at the blue bars, you've got $837 million of deployed capital in mature vintages from 2015 to 2020. Although 2024 was a great year insofar as it cleared some of the COVID backlog and we produced record cash realizations, there's still a lot left in there that's poised to deliver that, frankly, I think a lot of that may well have resolved by now, but for COVID. Now, are we disappointed with those investments? By no means. They're in great shape. Might it depress IRRs when those come in? Sure.
Although if I were somebody buying shares now, I'd be thrilled that that's still in the portfolio. In fact, we did just buy shares right now, so we got the benefit of that. There's a lot in the portfolio that is potentially poised to deliver in the future because it hasn't resolved yet. What's great about this slide is it shows you the past. You compare the black bars to the red, that the black is the money out and the red is the money that came back in from the black. You can see the IRRs and returns on invested capital by vintage. You see the blue, which is what's in the portfolio today poised to deliver in the future. That's what I want to turn to now.
The present, what we have, how we've built it, what its value is, and what it can deliver in the future. I mentioned before, one of our core competitive advantages is our quantitative modeling and our proprietary data set. Before any matter comes to the Commitments Committee, not just to decide to deploy capital, we have a two-stage process at intake to decide whether it is something we should devote resources to underwriting. It comes back again, if it makes it through that underwriting, to decide whether we should actually pull the trigger and commit capital. Before it gets there, of course, there's going to be a legal underwriter, many of whom you'll hear from today, who's going to engage in merits-based analysis. We are the best in the business at that.
We have a tremendous team of talent, and they will go through and look at the law, the facts, the jurisdiction, all of the various paths that the litigation could take and the obstacles that it may face and the potential damages and the range of potential damages. That is not enough. We will combine that with the underwriter, the legal underwriter will work with one of our quantitative analysts. We have got a really smart, really experienced group that will build a model for that investment to translate all of those risks, all of those possibilities into numbers that we can quantify and incorporate into that model data. What kind of data? Sure, there is some public data. We take it into account. It is there. It tells you things that it is useful on, like, what is the time to trial in a particular jurisdiction? How clogged is the docket? That is important.
The public data is lacking something that we have in our proprietary data. For one thing, it does not talk about settlements. It is all about adjudications because the settlements are confidential. They are not public. For another thing, it mixes together a whole bunch of stuff that creates noise because it is not just the high octane commercial disputes we invest in. It is also going to have small commercial disputes, personal injury disputes, things that are not really relevant to our analysis. In contrast, our proprietary data, we have got 15 years of a wealth of analysis and experience looking at thousands of commercial disputes that have lots of data that is really important to incorporate. By the time it goes to the Commitments Committee, we have put those things together. Otherwise, I showed you how good we have been, our track record on pricing to risk.
We could never achieve that if we did not have this ability. I do not think anybody else has anything close to it. I do not even think they try. We use this not just to decide whether to put money out in our underwriting process, but also managing cases through the litigation process. You will hear more about that from our team, from Andrew Farthing later today and Craig Arnott a bit. We also use it for balance sheet management, financial management, cash planning. It is very useful to the finance team. We have been doing this for a while since 2017. About $1.5 billion in realizations have come from matters that were modeled, and half of those were from matters that were modeled at the outset when we decided to put out capital. How good is it? What does it tell us about our book?
I'm telling you, this is great because it puts us at an advantage in building a book and making sure we're putting good investments in. What does it tell us about the value of the book? I want to unpack, Christopher Bogart threw a number out there comparing 2021 to today. If you add up all the models, if you take because every model, remember, it's probabilistic. It's going to be a weighted average of all the possibilities for each investment. Each one is going to boil down to a single number that's all those possibilities. It could go to trial. It could settle. It could win. It could lose. It could come in high. It could come in low. We weighted average. You add them all up. The number you get is $5.7 billion. Is that the number we're putting out there today?
We want to give you as much information so you can model us however you deem fit. A lot of it, we'll see, is going to depend on how often cases settle versus go to trial. We apply to this for your benefit, but you can do it differently. I'll explain why we do it. A 79% experience adjustment is what we call it. That's what generates the number, the headline number Christopher Bogart talked about before, $4.5 billion, which could lead to about $2.4 billion in modeled realized gains, 110% return on invested capital, which is not a reach. We did that in 2024. You look at realizations, that's right on what it was. Where's that 79% coming from? How do you determine that? To decide how accurate our modeling is, it's not a simple question of how good is your modeling.
You have to look at the different outcomes. Remember when I started talking, I said there's three things that can happen. You can win, you can lose, or you can settle. If you compare the model to what happens when we win, and this 114% number is not just wins and they pay the judgment, it's also settlements after an adjudication win. You win a trial, pending appeal, it settles. At a discount from what you're entitled to, to deal with the risk and time benefit of not having to be through the appeal. Still, we've won. It's not surprising we do better if you win a trial than the probabilistic weighted average of all potential outcomes because that's a good outcome. If you take losses into account, the number drops to 88%. You may say, Milo, you're falling down in the job. Why isn't it 100?
I would say, for one thing, all modeling is inherently, when you're in an investment function, going to be optimistic because you don't make investments unless you think they're going to do well. I'm not sure that's a bad thing. I think if we were 100% accurate in our modeling, that would tell you, our investors, and it would tell me that my underwriters are being too conservative and aren't willing to take on an investment that's a little murky, where the prediction isn't going to be perfect. They're going to leave something on the side. They're only going to take things in where the model is perfect. I think that would mean we're being too selective, just like if you had a 100% win rate, that you're doing something wrong. You have to have some loss. Our loss rate's very low. I showed you before.
I skipped by it because we've been saying it for so long, but it's like it's well under 10% of our deployments. And that's good. If it were zero, I'd start to say, hey, guys, we're turning down too much good stuff. The next number, the 73%, that is settlements. Is that surprising? No. I've said from the beginning, when we go to trial, we do really well. When we settle, we often happily take less than we could get at trial, but we eliminate the risk of loss and we get the money sooner. The experience adjustment that I'm talking about is looking at the balance of how many cases have gone to trial versus settled, blending them together. That's how you end up with a 79%, meaning across wins, losses, settlements, we bring in 79% of what the model said.
If things settle less, we'd be bringing in more than that. If they settle more, that's how we end up there. It is very hard for an underwriter, as good as we are at the outset, to predict with precision whether a matter is going to settle or what the odds are. I remember before Christopher Bogart and I founded Burford, talking to a lawyer I have tremendous respect for, and you guys should all, if you knew him, have tremendous respect because he's gone on to do a lot for Burford and made us a lot of money, all of us. What he said to me was, at the outset, when he's deciding whether to take a case on contingency, the thing he finds most difficult is predicting how the other side is going to react and whether they're going to come to the table to settle.
It's one thing to predict what a judge or jury is going to say and how you're going to maneuver. Does the general counsel have a rivalry with the CFO where he wants to show he's tough? Does the CFO have more power and want to clear this off the books? There are lots of political questions that can go into whether a case is settled, this case is going to settle, that are not totally about legal analysis, factual analysis. They're about the inner workings of the company. If we look at the last three years, there has been a marked uptick in settlements. We had less than half of our realizations coming from settlements before the last investor day, or at least the last time we put these numbers out in June of 2021. Since then, it's more than three quarters.
That 79% number is just coincidence. It's not the same as the other one. This is the percentage of proceeds coming from settlements. The other was the percentage of proceeds compared to the model. Just random coincidence. Why the uptick in settlements? Is that a trend? There are a couple of reasons why I would say it may not be a trend. For one thing, COVID. COVID led to crowded dockets, which meant that judges who wanted to clear their dockets really leaned on parties to settle. That's the easiest way to get a matter off your docket. Parties often agreed to settle because they were sick of the delays of litigation. We've been at this long enough. Let's go ahead and settle.
If that's the case, if that's why we've seen such a market increase in settlement these last few years compared to our lifetime over the 2015, then you wouldn't expect that to last. As the COVID dockets have cleared, you'd expect to revert back to the numbers we saw before that. Another reason is, I mentioned, we had a couple in 2022 and 2023, we had a couple of very large portfolios that resolved with lower ROICs, high IRRs. Those were going to come in because they resolved so quickly below what the model result would have been, the average, because we priced them for risk and duration. If it had gone on longer, we would have made more money. The IRRs were very attractive having them come in early. Those are a couple of reasons why I wouldn't expect that's necessarily a trend.
Frankly, when I've used the baseball analogy before, I said there's lots of singles and doubles. You go a couple of years with mostly singles and doubles and some home runs, and then you hit a couple of really big home runs, it changes the numbers. It could revert back. There's one reason why maybe it is a sign of a trend, which is Christopher Bogart has talked about how we have become so mainstream. Litigation finance is an accepted part of corporate finance now. Burford is a brand name not just among law firms, but among CFOs. We've done a lot of deals with larger companies, with Fortune 100 companies. When a Fortune 100 company is the plaintiff, you can imagine the defendant's going to take that case more seriously than when it's a smaller company.
A smaller company says, oh, if you had not breached the contract, we would have made hundreds of millions of dollars. They say, do we really believe that? Do we really believe you are going to be able to show a jury that? A big company says that, and they say, maybe we should go to the table and settle. We do not know the answer. We wanted to just explain to you why the increase, why we are applying this experience adjustment. We are assuming the trend continues for purposes of these numbers. You may say it is going to revert, and the numbers could end up higher than this.
That's why we've taken the $5.7 billion number, applied the 79% discount, brings it down to $4.5 billion, which generates about $2.4 billion of realized gains and 110% return on invested capital, which is spot on with our experience in 2024, just what we've done. Now, I want to make clear, this is all XYPF. It doesn't include the YPF investment at all, which, as Christopher Bogart said, is something that under all non-negative outcomes, we would expect to deliver a 10-figure return to Burford. There's still litigation risk. If it goes well, it's going to go very well. What's happening in YPF? We all know, because it's been pending. There is the appeal pending in the U.S., Court of Appeals for the Second Circuit, and there's the enforcement process, both in New York, where there's enforcement proceedings, and we filed recognition actions in multiple jurisdictions throughout the world.
In the appeal, you can read the briefs. Argentina's lead argument is this does not belong in New York, that it should have been dismissed in a doctrine called forum non-convenience. It would have been more convenient to litigate in Argentina. You'll also see from our briefs that's a very difficult argument to win, both because trial judges have a lot of discretion in deciding that question, but also the calculus changes dramatically after you've gone through all the litigation and trial. If the doctrine is about convenience, is it really ever going to be more convenient once you've tried a case and devoted all those resources for a decade to say, oh, let's throw it out and start again in Argentina? That is their argument. It's going to be up to the Second Circuit to decide.
I do want to spend a couple of minutes, though, on what has happened in Argentina in the time since we won this judgment. Before he took office, President Milei said the debts have to be paid. He was asked specifically, does that include the $16 billion for YPF? He said, yes, it includes the $16 billion for YPF. Shortly after he took office, he is under the hood and sees just how bad things are in the economy and in the government's fiscal situation. He says, the problem is we do not have the cash. There is a willingness to pay, but not the cash. No hay plata, was the term he used. What has happened in Argentina since then?
When he took office, there were rampant budget deficits, enormous inflation, a country risk that made it impossible to borrow, and an IMF facility that just seemed impossible to get over. You can understand why he would say there's not the cash to pay. There have been big changes, amazing progress. The deficit went from 15% of GDP back then to a 0.3% surplus. Monthly, the inflation was 25%. That's per month, not per year, down to 2.4%. The country risk went from close to 2,000 basis points. You can't raise debt when you have that kind of country risk, to in the 700s, and it has dipped at times into the 600 range.
The IMF facility that seemed daunting, the largest the IMF has ever done, there are public announcements from officials that the IMF and Argentina are very close to a deal that would give Argentina the breathing room it needs. Does that mean this is all smooth sailing? I'm not making predictions about that or saying that. In fact, it's going to be noisy. It has been noisy, and it will even get potentially more noisy. Why? Any big piece of litigation is going to be accompanied by that kind of noise. People don't just cut checks for $16 billion without a little bit of noise. In fact, you may hear more noise now than you had in the past. Why?
A year ago, a few months ago, when Argentina clearly did not have the money to pay, they had so many gating issues to be able to return to the capital markets, to attract foreign investment, to grow the economy again. They had to deal with inflation, the deficit, country risk, the IMF debt, lots of things. As progress is made on each of those other fronts, and there are some others to deal with, our issue, the judgment debts the country faces, becomes a more prominent gating issue for the country to be taken seriously by the capital markets to attract foreign investment and return to the capital markets. That is all I am going to say about YPF. I want to step back and just summarize what I have said. In the past, we have delivered great returns. It is $3.3 billion in with very attractive returns on invested capital and IRRs.
The present, we have a best in business approach to underwriting that prices to risk using our probabilistic modeling and proprietary data. As to the future, we've got a very valuable portfolio. That modeled realizations would say it's $4.5 billion, 110% ROIC, XYPF, plus the very valuable YPF-related assets. That is the past, present, and future. The question you probably want to turn to now is, what is the market opportunity? Meaning, how did we build this portfolio? How do matters come in, and how are we going to bring them in in the future? It's a great moment to ask that question because we have done historically very well during times of market turbulence, not just our stock being uncorrelated, but people end up in litigation during times of economic uncertainty.
I'm going to turn it over to Katherine Walonek to talk to you about the Burford market opportunity and how we build our portfolio and bring new matters in.
Good morning, everyone. My name is Katherine Walonek, and I lead Burford's intellectual property business. I've been with Burford for nine years now. Before I came to Burford, I led intellectual property strategy for multiple technology companies. In addition to being an attorney, I am also an engineer, having begun my career at Hughes Aircraft Company in California. I am excited to introduce our panel today on the Burford market opportunity. My three colleagues and I are engaged in different parts of Burford's broader business, and we are keen to speak to you today about how we work together to navigate the enormous global litigation market. It all begins with business development.
Burford's business development, comprehensive approach to business development, has made us the market leader. If you've ever watched Burford's webcasts, read our articles, seen us speak at conferences, you might be struck by how much of the Burford team is market-facing. That is intentional. We all view business development as a key part of our role. There are many benefits to that approach. First, we're proactively educating the market. What is possible, how they could use legal finance in their businesses. We're also demonstrating to them how smart and experienced our terrific team is. Third, by engaging broadly with the market, we are hearing their problems, and it allows us to innovate our offering and our financing structures to best solve our counterparties' issues. We've selected four areas of Burford's broader business to speak about today.
Now I'm going to turn it over to my colleague, Emily Slater, to talk about our U.S., commercial business.
Thanks, Katherine. Good morning, everyone. I'm Emily Slater. I'm a Managing Director at Burford. I've been with Burford for 15 years. Before I was with Burford, I was a litigator for 10 years at a leading law firm in New York. I work on Burford's underwriting team and with the U.S., commercial team. I'm going to talk a little bit about the U.S., market today. The U.S., market remains an incredibly important part of Burford's opportunity set, both in terms of our existing portfolio, where 50% of our assets are U.S.-based assets, and it's an incredibly important part of our opportunity growth in putting out significant capital and generating returns. Here's why. The U.S., litigation market is massive. It regularly returns multi-billion dollar verdicts and settlements.
In 2013, over 13 million civil cases were filed in the U.S., between federal courts, state courts, and the leading arbitration institutions. There is an almost unlimited amount of opportunity in the U.S., market. The question is, how do we boil down 13 million cases into a number of high-quality investable assets for Burford? We separate the market into two basic segments. One is single-party, bespoke single-party litigation, which is just company A suing company B over a dispute that's specific to them, a breach of contract, anti-competitive behavior, other kinds of specific disputes in between them. We also have multi-party litigation where multiple parties are injured by a similar course of conduct perpetrated by one or two or three big companies. Let's talk about bespoke single-case finance. We love single cases. It's the core of Burford's business. It's where we started.
It delivers a lot of those singles and doubles that John talked about in his presentation. It is really important for us. The challenge is there are two big challenges with big single cases. One is finding the cases when the disputes are generally private and we do not know about them oftentimes until a case is actually filed, and then the whole market knows about it. The other problem is scale. How do we scale? They are pretty time-consuming to underwrite individual cases. We have been looking for ways that we can scale our opportunity set and grow the business more quickly. In terms of opportunities, we are the market leader. Everybody knows if they want litigation finance, they know, call Burford. Everybody knows that. We have deep relationships in the market, over 15 years of developing relationships with lawyers and companies.
Many of the leading lawyers in the U.S., and many in-house counsel know not just to call Burford, but they know who to call at Burford because they've talked to them, they've met with them, they've met with our senior leadership. If you need to get something done, you know who to call. That relationship obviously drives a lot of important opportunity to us before it hits the market. Scale. In scale, we look really at two opportunities. One is efficiently putting out a lot of capital in one single case. Christopher Bogart talked about an opportunity, a $100 million opportunity like that in his presentation where we put out $100 million into a single case and portfolios. Those are an incredibly important part of building our capital, building our opportunity set over time, committing significant capital to a single law firm or company.
Particularly with law firms, we do this over and over again. We commit a significant amount of capital to that firm. We have pre-negotiated economics, and we have some exclusivity with them. When they have good cases that they would like to take risk on, those are going to come to Burford, and they are not going to hit the market. We are capturing pipeline with the best lawyers and the best law firms. Those cases are efficient for us to underwrite and put into a portfolio. We have a great example of that, one of our largest portfolios that is over $100 million. We pioneered this structure. We call it a going forward portfolio, pioneered this structure in 2015. With that law firm, we started with one or two cases.
Over time, since then, it's still ongoing, over 10 years, we've put over 20 cases into that portfolio, committed over $100 million of capital. Those are throwing off returns year in and year out over time as that portfolio continues. Talking about multi-party litigation, this is all about scale. We are looking for high conviction opportunities where we can invest with multiple companies that have a very similar or the same claim in one big litigation. We underwrite it once. There's a simple, very quick process for us to underwrite what the damages are, and we can offer significant monetization to companies in a very efficient manner. One example for that is proteins cases. If you've been following us, you've probably heard about proteins price-fixing cases.
There we have producers of chicken, pork, beef, and other products have engaged in a price-fixing conspiracy over many, many years and have overcharged every grocery chain, every food distributor, every restaurant chain by billions of dollars for inputs of purchasing chickens, pork, and beef. I mean, Hooters went bankrupt this week. They purchased billions and billions of dollars of chicken every year. They've been overcharged over many, many years for their products. That is an opportunity for us. We have multiple investments with many large companies that have been injured in those cases. Those cases have been going since 2016. They have been waiting for a very long time to get remunerated for their injuries. We have been able to monetize, and we have one investment of over $100 million that we deployed with a single company.
We have many other significant investments in that same litigation across the industry. That is an example of the way that we've scaled. We really think that's a huge opportunity for us in the future. Just last year, four large cases were MDL. That means there's going to be a very large litigation. That's a huge opportunity for us to do more of this kind of multi-party litigation. With that, I'm going to turn it back over to Katherine, who's going to talk a little bit more about our IP business.
Hello again. Talking about intellectual property business, three things. One, trends in U.S., patent law have made patent litigation incredibly challenging. Two, we've evolved Burford's intellectual property business to best adapt to that dynamic legal environment. Three, as a result, Burford is seeing higher quality and a broader array of attractive patent opportunities.
For some context, patent litigation is a relatively small part of the overall commercial litigation world. Every year, 3,000 to 4,000 patent cases are filed primarily in U.S., federal court. It's about 10% of the federal court filings that Emily Slater mentioned in her presentation. Of those cases that ultimately go to trial, they're very valuable. Every year, there are multiple nine and ten-digit patent awards in the patent space. They should be for what they have to the gauntlet they have to survive to get there. Let's talk about that. Over the last 15 years or so, U.S., patent law has trended against patent owners, making cases more expensive, higher risk, and longer duration. Patent owners who want to protect their intellectual property, who want to monetize their intellectual property, have to adapt by asserting more patents, by pursuing multi-jurisdictional litigation strategies.
Perhaps filing in the U.S., and in Germany and in the U.K., perhaps in the new unified patent court in Europe, perhaps in Asia. All of which, and they also have to survive long-running, hard-fought litigation battles with high stakes against some of the biggest technology companies in the world. All of this costs money. Most patent owners, even well-capitalized, large operating companies, simply are not able or willing to self-fund cases that have budgets of $10 million or more. To sum it up, patent cases have become too risky and too expensive for patent owners to self-fund. Their law firms are not willing to take contingent risk for these long-running cases. All of this makes legal finance essential for patent and is giving Burford access to an even broader array of higher quality patent opportunities with very attractive returns.
As legal finance has become more necessary, we took the opportunity to optimize Burford's patent investment mix. In the early days of legal finance, most patent investments were of the David and Goliath variety, where a small company, perhaps a university, was filing suit, asserting a couple of patents against a much larger company. Where, but for our capital, they would not have been able to bring that suit. Such cases tend to be narrow in nature, but if selectively chosen, can be very valuable. We still invest in these single cases today. As we all know, technology has become more prevalent and more important to our world, and patents have become more valuable. Corporate patent owners began to seek out options to monetize their intellectual property.
Such corporates typically have global businesses and the patent portfolios to match, which can number in the hundreds to many thousands of patents, all very expensive assets to maintain with carrying costs annually of millions of dollars. In response to this new interest in the corporate market, we leveraged our growing track across the entire corporate world, which is true of all of Burford, not just the patent business, as well as our global presence to engage directly with these corporates and help them understand how legal finance could help them unlock some of that trapped intellectual property value. As a result, our patent portfolio now includes a much broader mix of cases, global patent campaigns, patent divestitures, still a good mix of the single cases, broad-scale patent licensing, larger overall deal size with attractive returns.
As of the end of 2024, Burford's patent investments made up 21% of Burford's overall portfolio XYPF. We also reinvented our business development and underwriting processes to best succeed in this challenging legal environment. In the early days, most of the IP looked for litigation-ready patent cases. These are cases that largely came to us via law firms with the litigation strategies already set and really did not allow us to display the full range of our value as a strategic advisor. As time went on, we now engage with corporates directly and in much more of a consultative manner. We engage with our very experienced patent team, which has years of experience both in the law firm world and, like me, in the corporate side of intellectual property, to work very closely with the companies and help them understand what is possible.
We begin the conversation by discussing with them their business goals. Are they trying to protect their intellectual property, perhaps vis-à-vis a competitor? Are they trying to generate revenues from their intellectual property? Maybe they're trying to reduce costs. We then talk to them about what's their preferred approach to leveraging their intellectual property. Perhaps it's to assert their intellectual property directly as a plaintiff or to outsource the monetization via divestiture. We then iterate with them, focusing on their specific patents and the related technologies to develop a strategy that will help them achieve those business goals. This iterative process has the value of allowing us to engage very deeply with these companies, understand their businesses, and perhaps unlock multiple deals, and also gives us the ability to discover perhaps more attractive opportunities because we're working within perhaps hundreds or thousands of patents.
We get the added benefit of them having a strong innovation story and pedigree, which is helpful in the litigation that might come. To recap, our intellectual property business operates within an increasingly global environment and against the backdrop of a lot of legal challenges. With our deep experience in the patent space and our innovative approach, we are the go-to partner in the intellectual property market. I'm now going to turn it over to my colleague, Philipp Leibfried , who's going to talk to you about our business in mainland Europe.
Thank you very much, Catherine. Good morning, everyone. I'm Philipp Leibfried, and I'm responsible for finding opportunities in Europe. I'm based in the London office of Burford and joined from Freshfields some years ago. I'm actually from Germany, though, so I'm an English lawyer and a German national.
That's been quite useful for Burford's growth, as will become apparent. Right, let's talk about Europe. Europe is an enormous market of great significance. It's diverse, it's complicated, and it brings opportunity, which is what matters for you. If there's one thing I'd like you to take away today, it's that Europe is really one of the absolutely key growth opportunities for Burford and its shareholders. Let's unpack that a little bit. I'll focus on two jurisdictions in Europe. One is Germany, and the other is Spain. It's very important to bear in mind that there are lots of other important jurisdictions there, and they're all connected and diverse, and we understand them all and tackle them in the right way. With respect to Germany, I'll talk about something called the assignment model.
That is a way of efficiently bundling different claims in one structure and obtain redress in that way. I'll also talk about Spain, and I'll talk there about corporate portfolios, which is really an idea that many of my colleagues have talked about before. That is already big in the U.S., It's also happening in Europe now, and that also means growth. Let's talk about Germany. Germany, of course, needs no introduction. It's a massive market. It's a critical EU member state. It drives much of the EU agenda and that sort of thing. It's also undergoing a significant degree of fiscal expansion under the Merz administration. That is unprecedented. It's a generationally significant thing. It will have a huge impact on the country. It's a big market. If you think back 10 years ago, Burford essentially had no business in continental Europe.
Now, thanks to our efforts in Germany, we're probably the largest funder in Germany easily. We have scale. That is very, very significant. One reason we have that scale is the assignment model. Let me explain that to you by reference to a concrete example. There is a big ongoing litigation in Germany called the round timber litigation. This is about round timbers, the logs from the forests that are bought by timber companies and then cut up into pieces and sold. It's actually a very significant industry in Germany. What's happened there is that the timber buyers have been overcharged by the states that sell the timber from the forests in a significant manner. In fact, many of the businesses have gone out of business. The class of these people are SMEs. Most of them are quite small.
Some of them are a bit larger. If you think about it, if you're a small SME company somewhere in the German forest, there is no way of you suing your state. You're probably too afraid to sue your state with a high-quality law firm and a thought-out strategy and the capital to go to the end. What we've done is that we're essentially backing the entire German timber industry in a collective action, a collective redress model to pursue antitrust claims against a number of German states that have essentially fixed prices for timber. The problem in the past was that there was no way of doing that in an efficient way in Germany.
The assignment model means essentially that you transfer your claim into a collective structure that is backed by Burford Capital with its capital, and it enables each and every one of those members of the group to benefit from the eventual outcome. That is dramatic, and that has really changed the landscape in Germany. The assignment model has been backed not just by the German Supreme Court, but also by the European Court of Justice, the highest authority in the system. That is very, very significant. That has been a key reason for Burford's growth in Germany and its market-leading presence right now. This assignment model is very, very significant, by the way, for the entire European Union. You see it being used in the Netherlands. It's beginning to be used in Spain, which I'll talk about shortly.
That is very important because we're at the forefront of it, and it means growth. Right, let's move to Spain. It's very interesting to contrast Spain and Germany because Germany we've already tackled, and we're very big there. Spain is different. Spain is a very interesting market. Let me give you some of the features. Legal fees are quite low in Spain, but it's a large economy. Lawyers can take risk, which is quite unusual in mainland Europe. They're also very, very notably open to legal finance. Lawyers, they are very, very open to using it. Companies are using it. That's what I'll talk to you about now. This is this topic of corporate portfolios. Spain has a lot of very important multinational companies. The IBEX is the main example, but it applies in other European countries too.
In Spain, it's very interesting to talk about it. We're in a market position now at Burford where we regularly field inquiries from large corporations for multi-cases, single cases, and entire portfolio of cases. One interesting trend that's happening in Spain right now, for example, is tax disputes, tax litigation. It's complicated. It's difficult. It's something that we can actually look at. What does that mean for growth, though? This goes back to the moat that Christopher Bogart was talking about. When clients come to us with a large portfolio of cases that entails probably a multitude of different things, it could be an IP matter that we can attack with Catherine's team. It could be a tax matter. It could be a large arbitration against another large company or even a sovereign that we can tackle with our arbitration team.
The point is, taking all the features that Christopher Bogart and John were talking about, we can address these portfolios for corporates in a way that no one can because we have the scale of the capital. We can diligence all of these different matters in-house. We have the proprietary data and the modeling to look at it all. We do not need anyone else to do it. No one can do that. No one can do that. We have the brand. That means people are calling us, and it is something that is just an enormously significant growth opportunity in Europe. To go back to where I started, that is what I want you to take away from this. Europe means growth. Right. With that, I will turn you over to my colleague, Quentin Pak, who will talk to you about another significant growth area, and that is Asia.
Great. Thank you, Philipp Leibfried. Good morning, everybody. My name is Quentin Pak, and I'm based in Burford, Singapore office. I have now been at Burford almost eight years now, so time really has flown. Prior to Burford, I was actually in investment banking for about 13 years, but I started off my career as a lawyer. I was a derivatives lawyer. Now I'm combining both legal and finance and join Burford. Today, I'd like to talk to you about the Asia business, first by sharing with you some of the observations of the legal landscape in the region, what the opportunities are that we see, and more importantly, how Burford captures those opportunities. We all know that Asia has some of the world's largest economies. That's not new.
What you may not know is that some of the most important global dispute resolution hubs are also located in Asia. Singapore and Hong Kong are actually two of the most popular arbitration seats in the world. Now, that's all very interesting. What does that mean for us? Is there a market for what we do? That is where policy tailwind comes in. There are three jurisdictions in Asia, Hong Kong, Singapore, and imminently Malaysia, that actually have formal arbitration funding framework. Policymakers and governments in Asia are also very supportive in the use of legal finance. This is significant if you think about it, because we are in a new industry, and we have the government actually proactively building a market for us, a market in which we are the leader. That is why for Burford, it is a sizable market of opportunities.
Now, let's dig a little deeper. What are these opportunities we're talking about? First, again, on the left-hand side of the slide, again, you see Hong Kong and Singapore, two of the most established jurisdictions in the region and where Burford has offices. Now, these two jurisdictions have a lot in common. Both are English common law-based jurisdictions. Both allow arbitration funding, and both also allow the funding of insolvency practitioners to bring claims on behalf of insolvency estates. Even more interestingly, and Asia is a region full of big economies, we work with companies in those large economies like Korea and India, helping clients there with the global dispute portfolios. Now, I'll give you two examples. Recently, we worked, Catherine and I, actually, in the intellectual property space.
We worked with a Korean tech company that has a portfolio of patents that are being infringed by a much larger global player. We worked together and came up with some funding solutions, allowing the company to bring patent infringement claims in the U.S., District Court, as well as a trade secret misappropriation claim at the ITC. Another example would be India. We are now currently working with the insolvency resolution professional of an Indian company in the aerospace industry. It has a dispute over quality and also delivery of parts with a parts manufacturer. This is exactly the situation that we want to come in because of this dispute, the delivery issues, the quality issues. This company now is on the brink of insolvency. We worked with the insolvency professional and came up, again, with a financing solution allowing the company to bring claims.
This is a big claim. It's a nine-digit claim. This is an arbitration outside the region. You heard Philipp Leibfried talking about the assignment model and also Katharine Wolanyk talking about some of the more complex structures that she sees in the patent world, law firm portfolios that Emily Slater mentioned. In Asia, to be honest, we're not quite there yet. It's a new market. It's still very much a single-case market, which Emily Slater said she loved. From a product perspective, it's relatively simple. In terms of market dynamic, it's a very complex region. Asia has over 40 jurisdictions. How do we navigate this market? How does Burford find suitable opportunities for investments in such a diverse region? You can think of our Asia strategy as three simple points. First, we're targeted. We know the types of companies that we want to work with.
We know the law firms that we want to work with. In Asia, there are some leading local law firms that actually bring us a lot of business. We know who our partners are. More importantly, we take a one-team approach. Now, we have origination capability on the ground. Christopher Bogart mentioned we have cities all over the world, some of our staff who understand local market dynamics, who have deep relationships with corporates there. We have the same in Asia. When it comes to underwriting, the Asia underwriting expertise actually resides with our global underwriting team, our market-leading global underwriting team that John was talking about. Not only do we have Asia-qualified lawyers sitting in Asia, we have Asia-qualified lawyers sitting in London, for example. It is very much a global team.
That is important because it ensures consistency across how we underwrite cases. We make sure that we see the good cases applying the same standards. Also, from a risk perspective, we make sure we can manage the risk profile of the investments that we see in the region. The third part of the strategy is that we are selective. We cherry-pick the best cases that we see. This, again, is important. We see deal flow across the region. Again, you can imagine in Asia, the deals that we see fall into a very wide spectrum of risk profile. There are those that come from very established jurisdictions with strong rule of law to some of the other jurisdictions in the region, which, frankly, you can say the legal framework is a little bit more murky. That is where we have collection risk.
We need to be careful. What we do is we select the opportunities that make sense for us. These are proceedings where there is integrity in how the proceedings are conducted. There are investments in robust jurisdictions where there is rule of law. More importantly for us as a business, we make sure we get the returns that we want from the opportunities that we see in the region. That is, in a nutshell, our Asia strategy. We are targeted. We are selective. We are also consistent. Going back to our global business, the four of us have given you a glimpse of the opportunities that we see in the market and also how Burford has demonstrated success in capturing these opportunities. Again, more interestingly for everyone in this room, converted them into returns.
This is the message I want to leave you with. Burford is in the best position to capture these market opportunities because we have specialized teams, best-in-class underwriters, best-in-class originators. We're the pioneers in the industry, so we have a lot of experience in developing the market. We know how to develop the market. We know how to educate people in different industries and in different geographies. As a result, we know what the market needs. That is the end of the market opportunity presentation. Thank you very much, and I hope that has been informative. We have now come to halfway through the morning, so it's time for a break. We'll take a 15-minute break. We look forward to seeing you back here at 10:55. Thank you. All right.
If everyone could make their way back to their seats in the next three to four minutes, next few minutes, really, that would be fantastic so we can stay on time. Appreciate it. Okay. If I can get everyone to come back to their seats now, we're going to get started in one to two minutes. Thank you. Okay. Thanks, everyone. We're going to get started back with our second panel presentation that we call The Life Cycle of a Deal, which is going to give you some insight into Burford's underwriting and case management process. To kick things off there, we have Craig Arnott , who, as we mentioned, is virtual today. Craig Arnott, are you there? I am here, Josh Wood . Fantastic. Take it away.
Thank you, Josh Wood . Hello.
Good evening, Josh Wood , and welcome back to this part of the presentation to look at what we call the life cycle of our litigation finance assets. I'm Craig Arnott , Deputy Chief Investment Officer, today beaming in from London, as everyone has said, after a sorry passport tale, but nothing stops us. I am joined by my colleagues, Evan Myerson, Managing Director in our New York office, who leads our U.S., commercial business, and Andrew Farthing, a Director in the U.S., based in Texas, who helps lead our case management efforts all over the world. They are live with you on stage. The big question: what is the life cycle of a litigation finance asset? In a nutshell, it's the three stages of a legal finance asset at Burford that will ensure we maximize investment returns. First, it's underwriting.
Our underwriters review a case that's looking for finance and recommend that the good cases move to final approval and funding. It is how they do that that matters, and more of that to come. Second, deal structure. Our underwriters also work as the deal team with the counterparty, structuring terms that will protect our capital and maximize our returns. Third, case management. Our case managers oversee our investments once they're in the portfolio, working with our counterparty so that they can be in the best position to settle and win if it has to go to trial. Burford is their partner throughout. Now, Andrew Farthing is going to pick up the case management section, and Evan and I are going to look at the stages that move an opportunity to a deal to an investment. The next slide shows how we do that.
A legal finance opportunity, you see, starts at the top of an underwriting funnel, shown here on the slide. What happens is that once it comes in through the door, so to speak, it moves through diligence and approval and all the way to a financing agreement and financing. The numbers here you see on the side, as they so often do, tell the real story. They show how, through this process, we filter and can identify the most valuable opportunities. There is a large top of the funnel that you see because there are many thousands of inquiries and opportunities that are brought to Burford every year.
Those opportunities come from our own business development outreach, referrals from law firms with which we have relationships, direct engagement from repeat clients, who can be corporates or law firms, as you've heard today, and unsolicited inbound inquiries, which are very numerous because we are the market leader. They come through the door. We then conduct progressive diligence on those opportunities, and this is where our underwriters use Burford's proprietary data, exclusively ours, of course, 15 years of data, thousands of cases reviewed, whether we funded them or not, and what happened afterwards. That helps us work out what not just looks good on paper, not just what any legal analyst or researcher would say, but what, from real lived legal experience, is the type of case that will settle or will win if it has to be duked out in court.
Ultimately, we take forward just a small fraction of those cases for financing that come through the door. You see here the 2024 numbers: 2,000-plus inquiries became 806, which were identified as potential opportunities, which then became 296, subjected to a more intensive diligence process. It is that diligence process and its rigor that Evan Meyerson is going to tell you some more about now.
Thank you, Craig Arnott. Good morning. As Craig Arnott mentioned, I'm Evan Meyerson. I joined Burford in 2019, and I head up our US commercial business. I'm excited to walk you through the three main aspects of our underwriting process. First, how we diligence a new matter. Second, how we structure our deals. Third, how we price those deals. The starting point for any legal finance asset that we underwrite is the diligence process.
As John noted earlier, we place great importance on our probabilistic modeling to generate outputs. To inform the inputs of those models, we undertake a rigorous diligence process. Let's talk about that best-in-class diligence process. There are three overarching buckets of diligence that we focus our attention to. You can see those here. The first are the merits, second, damages, and third, collection risk. The starting point for any conversation internally is the merits. We're trying to answer a threshold question. That threshold question is, what are the chances of success for our counterparty to our deal in its dispute? To answer that question, we think about a number of different factors, including the facts of the case. Is there a compelling narrative of misconduct by the opposing party?
The relevant law, even if there's a compelling fact pattern, does our counterparty have an entitlement to damages under the law as applied to those facts? The stage of the case, Burford is stage-agnostic, but certainly, the earlier the stage, the riskier it is. That is where we'll use our different structures and pricing mechanisms to price around that risk. Jurisdiction and courts. Is this a jurisdiction? Is this a court that has handled this subject matter before? If not, we'll price that risk as well. Last, but certainly not least, duration. Critical to every underwriting exercise we undertake is the question of how long will this matter take to resolve, both at the various inflection points for settlement, as Jonathan Molot talked about, most of our opportunities settle, and if not, through trial and appeal.
Once we have all of those inputs, the underwriting team works hand in hand with our quantitative analysts to come up with a probabilistic model. We include all of Burford's proprietary data and analytics to come up with those inputs and outputs. When you think about Burford's secret sauce, it really is the combination of our scale, our global reach, and this underwriting effort taken on by our talented group of underwriters, all doing this in-house. It's that combination that separates us from the pack in the marketplace and allows us to get it right 93% of the time. Let's talk briefly about how we structure our deals. You saw Christopher Bogart go through this earlier. Burford prides itself on customizing our deals to suit the needs and interests of our clients. The simplest way to think about our structuring is really a two-by-two-by-two matrix.
For each one of our deals, typically, there's one of two potential counterparties, either a law firm or the litigant. For each of our deals, there's typically two sets of potential collateral, either a single case event, which you heard Emily Slater say we love, or portfolios. Last, there's two typical uses for our capital, either to fund a litigation budget, so that's the fees and expenses that can go into actually prosecuting a case, or monetizing our counterparty. By monetizing, again, what we're really talking about is effectively an advance on damages untethered to the cost of that litigation, treating a legal claim as an asset and providing effectively a corporate finance solution for both law firms and counterparties who have these claims and have those economics. Now we've done our diligence. We've thought about what structure works for this opportunity. Let's talk about pricing.
How does Burford price its deals? The answer is simple. We price to the risk. As you have heard, our capital solution is non-recourse. What that means is, if our counterparty loses, they keep our money with no obligation to repay Burford. The way we see a return is only in a successful outcome in their dispute. The risk is real. We heard both Jonathan Molot and Christopher Bogart talk at some length about the extraordinary level of effectiveness with which we have historically been able to price this risk. I can tell you, having spent the last six years actively pursuing deals in this market, time and time again, Burford stands alone as the only capital provider willing to commit big dollars to legal risk. Christopher Bogart talked about our competitive landscape. On the one hand, we have pure-play funders of litigation, none of whom have Burford's scale.
Only Burford in that market can commit big dollars. We have MultiStrats, who also participate in our space. While they have scale, they do not have the appetite for risk that Burford has. They are typically targeting credit return-type profiles. What you have is a unique positioning for Burford in that marketplace where, again, we are more times than not the only provider of capital willing to commit big dollars to legal risk. To see an example of this, one needs to look no further than the $100 million deal both Jonathan Molot and Christopher Bogart referenced earlier in our presentation that we closed in 2024 and resolved in 2025. That was a deal that I executed. I can tell you, at the start of that process, it was hyper-competitive. There were lots of interested parties looking to provide capital against this asset.
At the end of that process, there was one capital provider left standing, and that was Burford. We were the only ones in the market willing to put up $100 million toward that risk, and we have $125 million to show for it eight months later. What does that mean? It means that Burford's competitive advantage is our creativity and our ability to meet the needs of our clients, their interests, their needs, while also generating a meaningful return for our shareholders. We do that not just through our diligence process, not just through structuring, but through pricing. Back to pricing. In most of our deals, there are three levers that we can pull. Oftentimes, we combine all three. First is a fixed return.
A staple of most deals that Burford does is a first dollar return to Burford of its deployed capital at the time a case resolves. Typically, we're also appending a multiple to that return. That multiple will often rise over time, but that's the fixed portion of our pricing. There is a variable return, which is effectively a percentage of the outcome. Finally, as Jonathan Molot mentioned, duration protection. Given the asset class we operate in and the long duration of those assets, potential long duration, we will typically have a rate of return that applies a few years after we close an opportunity. Again, we are mixing and matching these pricing terms. I'll give you two examples about how we think about this. One is a deal we closed last year where we were very bullish on the merits. The economics were tighter.
What we did was emphasize the fixed portion of our return to ensure that Burford's downside was protected. In another, we liked the merits a lot, but it was riskier. Yet there was more home run potential in line with what John was showing you in charts earlier in the presentation. To maximize our exposure to that potential home run, we emphasized the variable return. There, we had a smaller fixed portion. We still would get our money back with a smaller multiple, and we would have more exposure to the upside with a percentage of the outcome. That is how we think about pricing. Now that we have diligenced a matter, we have negotiated a structure. We have negotiated pricing. I am going to turn it back over to Craig Arnott on the screen to talk about how we execute our deals.
Yes, it's back to the funnel. Where are we in the lifecycle? We've been through the diligence process. Evan's shown us that. That's what the team does as well. Goes through that process, discusses good prospects with other members of senior management throughout their conduct of the diligence, still needs to get to and through commitments committee. On commitments committee, including me, together, we've got 250 years, actually over 250 years of combined litigation experience. That's all of us together combined. What do we do? We test the conclusions of the underwriters and the modeling of the quants, and they'll all present to commitments committee. Especially, we'll make sure that the pricing will deliver in a way that is matched to the risk of the case.
For instance, to give an example of the type of discussion that could come up, you might get a CC member who'll say to the underwriter presenting, "Look, you're modeling strong IRRs. That's good, but we've got some doubt about the assumptions you've made about the appellate duration, for instance. Should we add an IRR floor to the deal terms?" Through the discussion, it might turn out that CC is only prepared to move forward with that deal with that IRR floor because they want to be sure of that return. Again, if you look at the slide, it's the numbers that tell the story of the complete process. Of the thousands we started with, 55 went to commitments committee. You see most made it through, but not all of them. 41 went on to close. That means 41 new matters in the portfolio.
That's where Andrew Farthing and the case management team step in and help manage these to resolution. Andrew Farthing going to tell you about that now.
Good morning. I'm Andrew Farthing, and I joined Burford about a year ago on the case management team. Before joining Burford, I spent more than a decade at a consumer electronics company you may or may not have heard of. At one time, it was known for thinking different. I managed a number of commercial litigation matters there in my time. In case management, what do we do? Our goal is to make sure that the money that goes out through our funding agreements comes back to us through successful realizations. That's what case management is all about. It's not a passive process. It's very much an active process. Let's start with the money, because that's what, in some respects, it's all about.
Budgeting, follow-on deployments. How much is this litigation going to cost? That's going to be something that was discussed during the underwriting process. Typically, there's going to be a budget agreed between the underwriter and our counterparty, by us and our counterparty, so that we have a sense of what is this going to cost. We're, in the case management team, going to follow along throughout the process. We're going to be actively engaged with the law firm, with the counterparty, to understand where are we in the case? Are we where we thought we would be? Are we spending the kind of money we thought we would be on fees, on expenses, on expert witnesses, whatever it happens to be?
It's our job on the case management team to make those in the litigation finance 101 types of deals that Christopher Bogart talked about at the beginning, to send that financing to the law firms to pay their fees and expenses on a regular basis. The goal of all this really is to make sure that our counterparties have enough resources to bring the litigation to a successful conclusion. The last thing you want is for them to get partway through and then not have enough money to be able to credibly threaten to take the case through trial and to appeal, because even as we've talked about, winning at trial does not mean you collect the money. You have to be able to proceed further. What else do we do on the case management team? We also serve as a second set of expert eyes on the case.
The way I like to think about this is, how do we win? That's, in my view, the most fun part of litigating. How do we win? That takes a lot of different ways. We can help to improve the presentation of the case. That's through filings, through complaints, through legal briefs, also through oral presentations by the attorneys. We will sit as a court judge, and we will ask questions of the attorney that's going to argue a motion, ask them tough questions. "Well, what about this?" or, "Had you thought about it that way?" or, "Would you concede the following?" Things that will help them to prepare for that presentation so that they can be able to provide the best version of the case to the judge.
As just a different example of that, I recently had a counterparty come to me and say, "Hey, we have this expert in our case. He's not really working out. We're looking to change to a different expert. We have heard good things about this person. Do you know anything about them?" I said, yes. Actually, I do. I took a case to trial with that expert three years ago. Let me tell you a little bit about them." We were able to together work together and find a good solution on a replacement expert so that we can bring that case to a successful resolution. As you have heard several times today, the successful resolution of most of these cases is going to come through the settlement process.
On the case management team, we can help provide both quantitative and qualitative assistance to our counterparties in that process. The quantitative side of things comes from our proprietary data. As just one example, I recently had a counterparty come to us and say, "Hey, the defendants are proposing a settlement. Here's the number they've thrown out. We're talking through it with our counsel, but we'd be interested to get your take. Are we getting lowballed? Are we getting a fair shake?" I work with our quantitative team, and I call back the counterparty, and I'm able to tell them, I think, helpful news, which is, one, it's not a lowball, but two, it's also not really a fair deal. It's kind of somewhere in between, which almost makes sense, right?
It's high enough to be attractive, but it's also not so high that the defendants really want to pay that amount quite yet. That quantitative input was helpful to the counterparty, but I was also able to give them some qualitative information as well. Been following along with the case, understand what's going on with it, understanding how we're going to win the case to say, "Here are some of the things you might want to emphasize when you go back to the defendants and say, 'Here's why you need to pay us more. Here are the risks you're facing, and here's why we're going to win.'" Enable the counterparty, empower them to be able to make those decisions in a positive way. Finally, we can do small things, even just like provide settlement calculators to the counterparties, lawyers, math.
They do not always go together. We are able to do that in a way that helps empower our counterparty sitting in the mediation or perhaps later to be able to say, "Yes, this is what I want to do. If I accept this amount, this is how much I am going to get. This is how much my law firm is going to get.
This is how much my counterparty at Burford is going to get. By doing that, by following along through the case financially, through the spend and the budget, by following along the case on the merits and providing a second set of expertise to our counterparties, and by providing assistance through the settlement negotiation and process on the case management team, we're able to help maximize the value of our legal finance assets in a way that provides better returns for ourselves and for you as our shareholders. To wrap it back up, I'm going to hand it back to Craig Arnott in London.
Thanks, Andrew Farthing. Where does this leave us? Let me recap the three stages. One, choosing the right matters.
Our underwriting team, with the exclusive benefit of our proprietary data and experience of what funded cases win, identifies valuable claims with a good return profile so that we can focus on the best prospects. Two, the terms. We need to agree with our counterparty a structure that can deliver the returns we want and keep us aligned to achieve that success. Three, to work with the counterparty and the lawyers to bring in those returns in a timely way and as cash. That is the core of Burford's business. Now we're going to move on to the next section, which is new business opportunities. Travis Lenkner, our Chief Development Officer, is going to take you through that.
Thank you, Craig Arnott. Good morning, everyone. As Craig Arnott said, I'm Travis Lenkner. Excuse me. I'm excited to have rejoined Burford last fall, focused on corporate development and growth.
This morning, so far, you've heard about Burford's accomplishments, the strength of our existing portfolio, and the opportunity for our existing investment team. Burford's growth potential is not limited to our case finance business. Right now, we're at a time of significant change and development in the broader legal industry. Thanks to our size and brand, Burford is well positioned to take advantage of that change. Over the next few minutes, you'll learn more about our corporate development function, which is focused on Burford's future and on continuing to extend our reach throughout the legal industry. We'll start with an overview of the legal services industry at a high level and then take you through a few of the areas where we're spending some of our time.
Let's start by returning to a slide that Christopher Bogart used at the outset to orient you to the global legal industry. Burford invests in legal assets, primarily claims and judgments in jurisdictions around the world. As Christopher Bogart shared with you, that is a pretty enormous TAM. It's so large and distributed all around the world in arbitration, litigation, all the different fora that it's pretty much impossible to quantify, but we know that it's big. For Burford, growth here on the left side of this chart means continuing to innovate around investment structures and strategies and also improving our investment processes to make them even more effective and efficient. We also see opportunities on the right-hand side of this chart in the legal services sector, which itself is a more than $1 trillion industry each year. That comprises two main components.
One, more than $800 billion in revenue annually for law firms around the globe, including about $350 billion in the U.S., and then another $200 billion in annual revenue for companies that provide services related to legal and regulatory processes. Now, there are a lot of ways to illustrate why this sector has grown at the speed that it has and why it's continuing to grow. As one example, take a look at this. Since the beginning of the 20th century, the U.S., population has grown by 435%. Over the same period, the U.S., lawyer population has grown by more than 1,000%. If you find this chart somewhat unsettling, even disturbing, you are not alone. I will let you insert your own lawyer joke here, but I will just say that at Burford, we refer to this chart as market opportunity.
More important, I think, than the number of lawyers is where they are and how they practice. Now, it's true. A lot of the attention in the profession is focused on the mega firms, the large firms, the sophisticated boutiques. Indeed, they dominate the headlines, and they also take up most of our attention at Burford in our investing business. As you can see, the vast majority of U.S., lawyers that are in private practice are solo practitioners or operate within very small firms. They are increasingly reliant on outside service providers and resources to do their work every day. That is a quick overview of the $1 trillion legal services market. For Burford, opportunity in this space takes many forms.
At a high level, what it means is investing in legal service businesses, including law firms, and extending our reach in a sector where we are already one of the leading institutional brands. We see a future where Burford's capital and services extend throughout the legal industry in ways that enhance our existing business and create new opportunities for revenue. Over the next few minutes, I just want to share with you briefly about three areas where we're spending a little bit of our time: law firm equity, the alternative delivery of legal services, and legal tech, including artificial intelligence. Law firm equity. Regulatory changes in the U.S., the U.K., and around the world are opening up law firms to outside investment. Some of those changes took place quite some time ago now. Some are more recent.
When those changes are combined with some of the structures that have been used in other professions to allow outside investment, all of that together is generating a really robust market and a lot of attention now being paid to this space. First, in the U.S., historically and really still today, the dominating rule by far and historically the rule everywhere prohibited non-lawyer ownership in law firms, and a separate rule said that lawyers could not divide legal fees with non-lawyers. That is changing. It's changing very slowly as things do in the legal profession, but unquestionably, the trend is toward a liberalization of those rules. Nowhere is that more apparent than in Arizona.
Five years ago, Arizona created and then rolled out in 2021 its own alternative business structure process to allow ABS licenses for law firms that would be owned in part or in whole by non-lawyers. As part of that program, Arizona has granted more than 100 ABS licenses. You may have seen most recently this past quarter granting an ABS license for KPMG. Pretty significant development and an illustration of how that space has really come up the market and is starting to become more institutionalized than when it started. That trend, combined with synthetic ownership and service co-structures that have been used in public accounting and healthcare to allow outside investment in those professions, is leading to a pretty robust market and a lot of activity around law firm investment in the U.S., In the U.K., the rules changed quite a while ago.
Early on, a lot of attention was being paid to publicly listed law firm vehicles. That has cooled somewhat, but in the last couple of years, it's been replaced by an increasingly robust private market. At Burford, we made our first law firm equity investment in the U.K., in 2020. By the way, that investment is still ongoing. All of our capital has been returned, and to date, it has generated a more than 33% IRR. We will continue to invest in this space in the U.S., in the U.K., and in other jurisdictions around the world as those markets and regulations open up and as the attention in that market starts to rise within it to larger and more institutionalized firms.
Natural transition from the topic of non-lawyer ownership in law firms to the so-called alternative legal service providers, or ALSPs, is a really clunky name for non-law firm companies that provide law services but that do not actually engage in the practice of law. Because they are law companies, not law firms, they can be owned by anyone. This sector is growing pretty rapidly at a faster clip than the annual growth rate for law firms themselves, and it is increasingly taking advantage of technology to expand market share and enhance margins as well. The technological developments within the ALSP space are reflective of the broader trend toward legal technology, including AI. Historically, not a shocking statement to make that lawyers were tech-resistant, really remarkably so, and have only recently raced to start to catch up.
A lot of the fuel for that effort and the impetus for that effort is coming through artificial intelligence and as a result of artificial intelligence. No investor presentation in 2025 would be complete without a mention of artificial intelligence, so you can all consider that box checked now. I assume we'll see some research reports reflecting that this was discussed for quite some time. In seriousness, legal is one of the sectors that is poised to be most affected by AI for some pretty natural and obvious reasons. That is the gas in the tank of a broader legal tech space. Legal tech used to be an oxymoron, and now it's its own specific vertical within legal services, and it's taking off pretty rapidly.
You see that both within law firms that are spending more on these resources and trying to adapt and keep up, and within companies and in-house law departments that are devoting an increasing share of their budgets to taking advantage of these tools as they insource more work from law firms, but then work with outside vendors and companies to perform that work more efficiently themselves. At Burford, we will also continue to lead the market in our own internal efforts to use proprietary AI to enhance our origination and our underwriting platforms. In these three areas and others, there is a lot of opportunity right now in the legal services market. As I said at the outset, it's really a time of significant change for a variety of regulatory and tech-powered reasons. That is a pretty generic point.
What matters for you and for all of us is that Burford is really perfectly situated to take advantage of these changes, perfectly situated to take advantage of this moment. Why is that? We are the world's largest investor dedicated to the legal space, no question about that. We are also, as Christopher Bogart mentioned earlier, one of the world's largest consumers of these legal services, buyers of services from law firms and law service companies. As you've seen demonstrated by the breadth of our team this morning, we are learning from and learning about lawyers, law firms, and the legal profession every day throughout our business in everything we do.
From Craig Arnott telling you about the top of our funnel, seeing more than 2,000 cases and investment opportunities every year, and us performing diligence on a significant subset of those, all the way to Andrew Farthing at the other end of the process talking about the depth of engagement that we have with lawyers and law firms in terms of how they think about their work and also how we manage our legal spend. For all those reasons, our expertise, our resources, and our global reach, we will continue to pursue organic growth while also remaining open to and opportunistic about inorganic possibilities that the market might present. Above all, we will remain committed to continuing Burford's track record of innovation in the legal space.
Christopher Bogart and Jonathan Molot founded this company to bring capital and finance principles to a stodgy profession that had been really slow to adapt them. We will continue to lead the way in the legal industry, deploying our capital and our ideas in a disciplined, responsible way as the market matures. Disciplined, responsible, and mature are also three words you want to hear someone use when they describe our next presenter, and that's our Chief Financial Officer, my colleague and friend, Jordan Licht. Thank you all very much.
I'll tell you the three words I used to describe Travis Lenkner. No, but thank you, everyone. It's great to see a lot of familiar faces and also new shareholders in the room. I'm going to focus now on bringing together what my colleagues spoke about into four key themes. The first theme, and we hit upon this all the time, cash.
Cash is what drives the business. We've put out for the balance sheet $1.8 billion and brought home $3.3 billion. We're focused on cash. How does that translate, though, into our unit economics? I'll spend some time talking about the top of the economic funnel and how that makes its way down to the bottom line. Of course, cash doesn't match GAAP. I wish it did. It doesn't. Craig Arnott talked about the commitments committee memo. I promise you our modeling team doesn't actually model out the GAAP. They focus on the cash. I'll walk through the differences and why they exist. Finally, bring that all together into how we're going to generate a long-term ROE of around 20%. How are we built? We're built into two segments. It's pretty simple. We have our principal finance segment, which is focused on balance sheet capital.
As you can see, we have a $5.2 billion portfolio, which we manage, and then a $2.2 billion portfolio, which is our asset management business. Very straightforward. The asset management business includes the partnership with the Sovereign Wealth Fund that I'll continue to describe later. Here we have a combination of a little bit of that cash versus GAAP that I talked about. On one side, we have our total revenues. You can see in 2023, a big bump. What was that driven by? Partially, that was driven by the great results in the YPF with summary judgment. On the bottom, of course, that falls to the bottom line in terms of net income to you, our shareholders. On the other side, we have realizations.
Realizations, obviously, were slower a bit during the COVID period and have continued to tick upwards, where we were at $641 million last year. That is driven by the record net realized gains. That is the incremental gain on top of the money that was put out. That is big picture. Let's do a little bit of teaching around how does this actually work on just a simple asset level. On this side, we have think about on the cash basis. We put out a deployment. Some time goes by, we will put out more deployment. Now, the thing to remember is that we put out the cash on the drip financing when the money is actually spent, so as the lawyers are incurring fees and expenses. Upon a settlement or a win, the proceeds come back. That is not exactly how the GAAP works.
On the other side, I demonstrate fair value. Fair value is fairly straightforward. If you're used to other mathematical concepts in finance, it's a net present value. What's that net present value of? It's of our future cash flows and the expected return. That expected return, though, has a haircut against it, and that's the litigation risk. That risk changes over periods. You start off with a deployment, just like the cash side. Of course, the asset's going to be worth the capital that you put in. You put $10 out, the asset's worth $10. In future periods, you do an MPV. What changes is when we see a milestone, when we see an objective event that allows us to reduce that litigation risk premium that's assigned to the asset, and we discount it back. It ends the same way, though.
It ends with a realization, and that's when we focus on the cash. Bringing that together, that was an asset level. Let's walk through how that actually impacted the balance sheet in 2024. We start off with $3.4 billion of fair value on the balance sheet. How did that get larger? It starts off with deployments. We put out close to $400 million in deployments. Then, because it's an MPV, you have the impact of duration. That's the asset moving forward in time over the course of the year. Interest rates are volatile, and that impacts an MPV. In 2024, interest rates were flat if you look at just one date and then the end of the year. That being said, we had a lot of volatility in the quarters, and that's going to cause a change. Overall, in 2024, rates were flat.
You have milestones. These are the objective events that you see that are bringing the asset up in value. Finally, realizations. Realizations are going to bring the asset value down. Now, that's a good thing. What happens is when a realization occurs, you're going to see the unwind of the previous fair value that had come into the fair value of the book. We saw that in the fourth quarter, where the unwind of previous fair values was done because we had large realizations. That was the revenue side of the business. I'll talk a little bit about the expense side. What you see on this side of the slide is our operating expenses excluding the long-term incentive comp. Long-term incentive comp is the carry program. I want to remind folks, carry is, again, cash-focused.
We pay out carry to our employees when the asset actually realizes, when the cash comes in. You look overall, we've been between 3-4% of our portfolio of total expenses against the fair value of the assets. That's been coming down over time as we continue to scale. The pie chart shows how our expenses, our predominant expenses besides some of the back office expense, is our compensation to the great employees that you saw today on the stage. How is that broken down? Salaries and benefits and an annual bonus compensation. You also have 44% of it that's aligned directly with you. We have our long-term incentive comp. Again, that's the carry program. That's paid out in cash, but it is recognized in fair value when we see the fair value goes up. Then share-based compensation.
The other piece to our business model is we have leverage. We have built over time a responsible laddered debt maturity schedule with just under $1.8 billion of debt outstanding, an average interest rate of just under 7.5%, but more importantly, a 4.5-year duration, which is longer than the average duration of our concluded cases. We are responsible in using leverage. Right now, at just under 0.8 times debt to equity. Why do I talk about all these things? It is to bring together to then show you how do those pieces come together into the unit economics. Before I get into the unit economics, I want to tie some of Jonathan Molot presentation to the actual fair value on the balance sheet. On this side, we say, "Hey, what if we won all of our cases?
All of them go to a final adjudicated win. XYPF, that number is $9.6 billion. Not every case goes to a win. The way that we then think about that fair value is it's adjusted for two things: duration of the cash flows, as well as that litigation risk premium. That's the difference then between the $9.6 billion and the $2.1 billion. We then have our net unrealized gains, approximately $500 million above the deployed cost. That $4.5 billion fits in neatly. As Jonathan Molot described, that's the expectation or the adjusted expectation of the models. In addition, we expect to earn using that same model output around $400 million over the course of the future years related to our asset management business. We've seen this chart. In fact, you've seen it once before today.
I bring it up to show that no vintage is the same. It's not the same when it comes to an IRR. It's not the same on ROIC. It's not the same in terms of weighted average life. It is important to look overall at the total. Again, we have good years. You look at the 2018, 2019, 2020, all with different IRRs with varying degrees of ROIC and varying degrees of weighted average life. How do you bring that together? You can do that with a very simple chart. This chart shows you that, which obviously is intuitive, but that shorter duration can bring together higher IRRs. If you look at this corner, we talked about an example where we had a 40% ROIC. If it's only out for a year, the math's obvious. That's a 40% IRR.
You can look at the 110, the 120 in the middle. Three and a half years can play itself out into the mid-20s, 25% IRR. You pull that and say, "Okay, how does that then break down into our unit economics?" First, the income. This is off of a base 100 asset. A 23% IRR is going to earn $23. You have the asset management fee. That is the partnership in this model with the Sovereign Wealth Fund. You have interest on cash. We do manage a liquidity portfolio so that we always have cash available to do the next deal and to provide to our partners. Our operating expenses, and then our long-term incentive comp, interest expense, and then a tax rate. It is very simple. The unit economics break down.
In that middle column, a 23% gross IRR results in a 21% approximate return on equity. Why is not that perfect in GAAP? There are some headwinds to ROE and some tailwinds. Let's talk about some of the headwinds. The first one is YPF. YPF makes up slightly over 40% of our fair value. In a year when you have an asset that does not actually have an objective milestone that we are going to see and recognize in revenue, it is going to be hard to achieve that 20% ROE. Our revenue also is backdated. When you think about those milestones and that activity, and you look at a sampling of recent activity, what you will see is that 40%-50% of the revenue is recognized before the conclusion of the asset. Let's do the inverse of that.
What does that mean? That means that 50-60% is recognized at conclusion. The revenue is going to be backdated when you look at the way our valuation policy works. It also, not only being backdated, it's not front-dated. When we put money out the door, we do not normally see an actual outcome, a milestone within the first year and a half. Both of those combined are going to be headwinds to the ROE target. The pandemic. The pandemic, unfortunately, slowed us down. The good news is the pandemic slowed us down, which means that the portfolio, and you have seen that over the last several years, is on the uptick with realizations. The fact is that we have $768 million of active deployed cost in the pre-2020 vintages. Operating leverage is relevant. It is not just financial leverage.
We talked Christopher Bogart mentioned 13 cases of $100 million or more. That didn't take much larger teams to execute. We've talked about the concept of claims families. Fortunately for you all, back office is fixed, like myself. The other piece is Evan Meyerson talked about our deal structure and how we try to create deals in which we can both protect duration on the short end as well as the long end. Bring it all together. What does that tell you? Again, where's our focus? Cash is how we focus on the business. Cash is what we look at on a daily basis. You can bring it together to see the unit economics of our deals with all of the different operating levers and why that's attractive. There will be variance. There will be some noise in GAAP.
We do believe that pulling that all together, that we have the ability to generate a long-term ROE around 20%. With that, I'd like to turn it over to Christopher Bogart to bring us all together with some final remarks.
Thanks very much, Jordan Licht. I am conscious that I am all that stands between you and grabbing some food and asking some questions. I will not take very much more of your time this morning. I did want to go back to a few key points that we've made during the course of the morning. When you look at the core business, and this is the core business without YPF, we've been clear about what we think the opportunity is here. We think there is a very large addressable market that we are still just scratching the surface of.
We think this is an area that is going to continue to grow, continue to perform, continue to mature. We think that we have the opportunity to be right in the middle, right in the heart of making that happen, just as we have for the last 15 years. That makes us enthusiastic about the idea of being able to double the portfolio base. Again, we're just talking there about the deployments out the door and the additional commitments to put cash out the door by the end of 2030. John took you at considerable length through what is in the portfolio today. These are all assets that are sitting there. They're going to turn into cash. The inevitability of the litigation process means that that will occur. We could literally do nothing else in this business and just go into harvest mode.
For years, we would generate substantial cash flows from those assets. Think of litigation as a giant conveyor belt. It is going to continue to go forward inexorably. Because of the structural nature of litigation, you can have a high level of confidence that many of those matters are going to resolve positively, either by settling, most of them, or going to trial and winning. Sure, there will be some losses, and we have a historically low loss rate. Those cases are effectively money good. The only question is exactly when they become money good. Jordan Licht has given you a fair bit of insight into how those top-line outcomes work their way through to bottom-line outcomes and ultimately to shareholder value expressed in a number of ways, including ROE. We have YPF.
YPF, some people describe YPF as sort of the giant cherry on top of the cake. That is not a bad way of thinking about it. It is a very large piece of our asset base right now. That is because of the demonstrated value that has occurred. Remember, we have already sold a portion of YPF to third-party investors. YPF is already a solidly profitable asset for us regardless of what happens next. As John and I both alluded to, there is going to be noise here. There are going to be twists and turns in the litigation process. In any positive state of the world, you are going to end up with a very substantial 10-figure outcome for Burford. YPF stands alone as being interesting. We recognize that YPF creates a challenge for investors because, "Hi, I am a domestic specialty finance investor over here.
Oh, by the way, why don't you also go and have a look at Argentine debt? Thanks very much. We recognize that that's not uncomplicated. At the same time, we think it's a tremendous opportunity to have further value created in the Burford story. Travis Lenkner gave you a little bit of insight into what we think of as our ability to widen the aperture a little bit. Let's be very clear about this. This is not some new horizon. This is not style drift. This is not me as a technology venture capitalist saying, "Well, gee, I was doing consumer internet stuff, but gosh, medical technology looks pretty cool over here, so let me go give that a try." This is core to what we already do. Travis Lenkner talked a little bit about legal technology, for example, an area that is growing rapidly.
We spend an enormous amount of money today on legal technology. When we do a case of any meaningful size that's going to cost $10 million-plus, we're going to be spending more than $1 million of that $10 million is going today to legal technology. You can't do a big piece of complex litigation without being involved in those things already. This is not new for us. What is potentially new for us is being more directly active in that space instead of only having a secondary relationship with it. We think there are exciting opportunities there. This is core to what we do and what we have been doing for the last 15 years. What does that wrap up to? A solid, growing core business that continues to deliver asymmetric high returns that are uncorrelated to markets and economic conditions.
By the way, when things go badly in the economy, what tends to happen? People tend to litigate more. Either because they do not want to pay each other and enter into disputes, or because in response to economic pressure, they cut corners and do illegal things and get caught. Virtually everything that happens in the world, frankly, creates litigation and is our friend. Market uncertainty, litigation. Tariffs, litigation. We are in the catbird seat for what happens in times of stress. You add YPF, and you add some interesting new opportunities. With that, that is Burford. We hope to be back to you at another Investor Day showing how we have been able to perform against those dramatic opportunities that lie before us. Now we are going to take a few minutes.
We'd invite you, for those of you who are in the room, to go and grab some food outside. The faster you come back, we'll start Q&A. The faster you come back, the more time we'll have for questions. We look forward to engaging with you. Thanks very much.
You don't have a water? Oh. I'm waiting for the green light for our television audience. Feels like an NFL game when you're waiting for the commercial break. Commercial break. Okay, we're back. Welcome back, and the three of us, and anyone else from Burford, are happy to take your questions. We'll intersperse questions live here from people on the webcast, so if people on the webcast have questions, please submit them that way. We've got a couple of people with handheld mics to walk around for people in the audience. Oh, with a sir.
Thank you. Randy Binner from B. Riley Securities. Thanks for the presentation. I think it's very helpful. The question I have is, I have it on slide 43, but it might have been 44 up there, but it's the $2.4 billion of modeled realized gains. And I think that you use a discount rate, and it's probably a rate over time and net present valued back. Can you dig into that a little bit more, just kind of what the thought process and assumptions are behind that $2.4 billion? Because it's a big part of the kind of sum of the parts approach to valuation. And then I'll have a follow-up.
Jordan Licht, do you want to?
Sure. I think you started off by referring to Jonathan Molot presentation. When Jonathan Molot presented the gross number associated with the portfolio, there's no form of discounting in that. The probabilistic model output versus fair value both start from the same place, understanding the wind node. The fair value approach, though, does use a discounting NPV approach. In that sense, we're using right now, it's an approximate 7%. It's based off of a basket of public securities and more indices that are going to generally track with the broader interest rate environment and the duration of our assets. That's what's going to fluctuate in the discounting of the NPV associated with the model. John's presentation was a gross output.
Okay, so the 5.7 down to 2.4, that's a kind of a gross future number.
Yeah, so the 5.7 becomes the 4.5 when you discount based on that 79% adjustment. Then we're looking at what we project to be the total spend. There's a certain amount of money we've already spent, and there's additional spend we're projecting based on budgets and the percentage of definitive commitments we generally spend when things go to the conclusion. That's what's going to drive the difference between the 4.5 and what we project to spend is what results in the 2.5.
Okay, that's helpful. I guess the follow-up, and it's also valuation related, but I find the 20% ROE framework incredibly helpful. There's a lot of details in explaining as an analyst positioning the stock. As part of that, do you think as the book grows and there's kind of more like a larger amortization, if you will, of volatility, do you think your EPS on a quarterly or at least an annual basis can be something that becomes more stable? The settlements, right? The settlements are doubled. That should lead to a more steady earnings stream. Is it too simplistic to think that the EPS would be kind of more streamlined or more predictable over time?
A couple of things. One can but hope, of course. The challenge with the business historically has been the growth and evolution of it, frankly. I made a crack earlier in the presentation that it would be really hard if we had just stayed writing $5 million tickets to amass a $7.5 billion portfolio. That is absolutely true. The challenge has always been because we have had versions of your question over time, of course. If the business had stayed static, if we had simply continued to write $5 million tickets over and over and over again, and now we are writing a huge number of them, then I think you would have some greater hope of achieving that. The problem has been we keep on evolving the business, deal sizes keep on going up, deal risk keeps on changing. I think it becomes more difficult.
Look, it represents one of the fundamental conundrums in this business, and Jordan Licht touched on it as well, which is that we operate the business on a cash basis. That's how we think about it. That's how we set targets for people. That's how we incentivize people. That is in part because we don't think that it's the right thing to do to, for example, pay people on unrealized gains. It's fine for us to say as a piece of litigation is going on, this is a different kind of security than lots of the market securities you would see. Even on a crappy day like today, things are not going down by 40%. Whereas, fine, we have a piece of litigation, and along it goes, gee, it's going well. It's going well. We've won this motion. We've won this motion.
Oh, the jury didn't like the case we lost. Doing anything in the middle of that for us is, from our perspective, pretty risky. We like to look at it on a cash basis. Of course, that ultimately then causes some challenges when we try to translate it into EPS and also into ROE, both of which are fundamentally accounting measures that have a whole lot of noise in them that we don't think is all that useful in running the business.
Thank you.
Sure.
Hi there, James Williams. Two questions. One, when we think about the long-term growth in the business and that chart with the funnel, where do you see as the bottleneck in that process to doubling the book by 2030?
It's an interesting question because one of the things that people, lots of people that have investment funnels like that are using them to show selectivity. They try to make the argument to investors, we are really, really, really selective, and therefore you should think our investments are really high quality. If you pick up the random private credit deck, that's what you'll see today. Oh, we only take 3% of the things we do, and we get higher returns. We actually, perversely as it sounds, we actually want the top of the funnel to narrow somewhat because it's expensive to do the diligence process that goes through the funnel.
We have been successful in educating the market over time to increase the quality of the opportunities that we see and therefore decrease the amount we have to spend on working through opportunities that are ultimately going to be clearly unsatisfactory for our book. When you talk about the bottleneck, I am not sure that there is a bottleneck. The issue, of course, as I said earlier, is around adoption. If I go and talk to a group of CFOs and I say, there is not a single CFO in the land who says, oh yeah, I am happy about what we are spending on legal expenses, and I think it is a good thing for shareholders that we are. There is not a single one that says that. Every single one of them wants to get rid of the legal expenses, wants to get them off their P&L, wants to reduce them.
There is a fair bit of corporate inertia from that wish to the actual execution of it. We change that every year, but that, I think if you wanted the bottleneck, that's the bottleneck. It's getting people to prioritize using this capital, even though they intellectually understand that it's a good thing.
Thank you. The second question I was curious about in the space regards competition. If I were a competitor, I can see that Burford's returns are fantastic. What stops a prospective CFO from shopping a quote at Burford to another competitor?
Oh, I don't think anything stops them. In fact, they do shop the quotes. If you listen to people like Andrew Farthing who are up here today, this isn't a commodity capital business. People are looking at a variety of value associated with the deals that they're making with people. We bring a lot of non-financial value to the party as well as providing them with capital. Do we lose some deals to lower-cost capital providers because people are entirely focused on price? Sure. The flip side of that happens as well. If one of our competitors goes and pitches a company and gets their interest, that company is very likely going to say, well, presumably this person in front of me is not the only person doing this. Let me poke around now that I'm interested in this concept.
Let me poke around and see who else does it. They're going to find us because we're the big name in the space. They're going to come to us as well. We're going to make them a proposal too if it's a desirable investment. The presence of competitors is a net positive for us from our perspective, not a net negative.
Yeah, we've seen this play out. I could think about Catherine will remember in the patent space, five or six years ago, maybe even a little longer, there were a few new firms that came in that tried to compete. They would generate a lot of interest, but it fairly quickly got to the point people would call us and be like, you do not have to beat them on price, just be in the ballpark, and then not even calling them. They sort of found it. They just realized we were able to do what others could not.
There was a question back here, I think. Gary.
Thanks. Investing in law firms sounds like a huge potential growth area long term, and you seem really well positioned to be a leader there. How do you see it becoming a bigger piece of Burford, and how do you underwrite the returns relative to case assets?
Since John is the original architect of the theory, in fact, so John, long before this became reality, John has been writing scholarly work on this very subject.
Yeah, so Gary gave me a softball. That basically, I had written an article about the very reason that our business exists is that law firms are structured in a way that makes no sense. They're financed like food trucks. You could have a multi-billion dollar annual business. The cash comes in, the cash goes out, no permanent debt, no permanent equity. It makes no sense. We were able first to do what you could call project finance. There's an individual matter that we could finance. It makes no sense from a client service perspective. As Christopher Bogart said, CFOs hate their legal staff. They don't want to be paying hourly fees. If you were a contractor, if you're a real estate developer, call a construction company and say, how much will it cost to build that office building? And they said, I'll charge you time and materials.
You're like, I can't run a business this way, but that's how lawyers have charged. They've not charged that. They've charged that way because they don't have a source of capital. It is efficient enough to have done it first with single case finance and then portfolio finance, but there's no reason it shouldn't be done with law firm equity. It just makes so much more sense. I've written articles in the Southern California Law Review saying, years ago we should do this. Before we did it, we made our first law firm investment. Travis Lenkner referred to it in 2020. We've earned a 30%+ IRR and gotten money back on that. We're off risk. It's been a great investment. I think that is going to be a big part of our future. We've been talking to law firms about it. We have structures that work.
The reason we are really well situated here is forever, the market for legal services and the capital markets have not connected. There is a disconnect. For the law firm that sees the light and realizes that taking outside capital makes sense, it is still a huge leap to go take money from public markets or from a hedge fund that does not understand. We have got law firm DNA running through us. We understand how law firms operate. They can feel comfortable viewing us as a financing partner that is not going to mess with client relationships. There is duty to courts, that sort of thing. I am glad you asked.
Yeah, now we just need state regulations to catch up with that. We'll take a question from the webcast.
All right, the question from the webcast is around capital management and allocation. Can you explain your capital allocation policy between case investment, new initiatives, buybacks, and dividends? In other words, how do you think about the trade-off between growth and value vis-à-vis buybacks?
Christopher Bogart started off actually answering some of this in the shareholder letter, but we do get this question a lot. Our focus has been to continue to deploy capital into the asset base. If you look overall and you look at the compounding that that asset can do, the relationships that we've built over time, we think the greatest value for shareholders is to continue to deploy capital into the asset base and to continue to grow the book. We haven't been, and we don't expect to be a user of leverage to then go and buy back shares.
Thank you, Marga Jarne from Focus Capital Management. Thank you for the very educational investor day. Your modeling says that you mentioned that you have two $100 million plus investments have concluded. How confident are you that your modeling, which is mostly based on smaller investments, transfers over to these larger investments, especially considering that there's no case, it doesn't have any risk? If you have a $300 million monetization that somehow goes sour and you lose that, that could be a large hole in the model.
That would be unhappy, to be sure. Jonathan Molot can probably talk to this at some length if you'd like. I would say, though, that in many instances, size is not necessarily the relevant criterion in litigation. Size is a function of the ultimate damages that a matter produces, but it doesn't really infect, if you think back to the analysis that Evan Myerson described, it doesn't infect the other buckets of that analysis.
Yeah, just to be clear, those couple of two deals that I gave examples of that resolved in that period was to show why ROICs were suppressed in that period. That's not the universe of our experience with larger portfolios. Often, when we talk about a larger deal, it is the modeling of a number of smaller matters that make up that larger deal. It makes it complicated for Jordan Licht on a GAAP basis when one part resolves and the other continues. Our quants are able to build a model that's not just a single outcome. It puts together the aggregate, and often our returns may be cross-collateral. They're always cross-collateralized. It requires some complicated modeling, but we have ample experience.
To the extent it's a binary risk like the arbitration result, I will say our tolerance for risk does vary with the size of the check we're writing. That we wouldn't, it's one thing to invest $10 million in an early stage litigation that you're hoping is going to ring the bell and win a trial. You're not going to give somebody $100 million for that case to monetize what you hoped happened if there's that much risk attached to it. I think our modeling is already pretty mature when it comes to those larger bets. We're not changing our way of deploying capital in a way that would put the model's accuracy at risk.
Got it. You mentioned in one of the slides that you put into different buckets the level of risk you're taking on each investment. With the highest risk bucket was 25% plus risk of loss. What's the highest risk of loss Burford is willing to go into for any investment?
I'll say for one thing, we have used those buckets for your benefit so we can share it with you. As I said, when I showed the bar of all the various outcomes, we don't consider it just in buckets. It's a much more nuanced approach. You know, one might say, well, why don't you take a case that has an 80% chance of losing, but if you can make 100 times your money, go ahead and do it. Generally, in law, nothing feels more likely than 80% chance of anything. And so if somebody says you have an 80% chance of losing, you're going to lose. We don't do that. We tend to gravitate toward it's going to be more likely than not that we win before we'd actually make a bet.
One might say from a financial analysis standpoint, why do you take more risk and are loss rates pretty low? Generally, I think it was Evan Meyerson who talked about the first gating issue is look at the merits. Are you going to win? That is generally where we are. We are not going to take a case that we think is more likely to lose than win.
Got it. Just one last question for now. Pre-COVID, I believe Burford invested more in, had also investments in places where they were the principal instead of funding someone else's lawsuits. They were the principal of the, they invested in a company that did various, I think, Delaware cases that aren't really relevant anymore. Are there any other, is Burford at all considering going back to being a principal in cases at all?
We certainly do not rule it out. What you are talking about was one specific strategy that we exploited for a couple of years when there was basically, from our perspective, an economic mismatch in an area of Delaware litigation, and we raised a specific fund just around those kinds of cases. We do not have one of those opportunities at the moment. That being said, the control that we get in matters and the way that we structure deals with counterparties ranges. Sometimes we do, in fact, buy claims out of bankruptcy and where we actually become the owner of the claim and take them on. Sometimes, as in the YPF case, we are hired to be the litigation manager, and we have quite a lot of control in the YPF context. There are other examples like that.
We’ll also take on, we have derivatives and security positions as well. There are certainly instances where we are more like the principal, but it’s really a spectrum, if you will, as opposed to a binary choice.
Thank you. Thank you again for a very helpful investor day.
No, thanks.
My question is about the three new areas that you're looking at investing in, and particularly in the alternative legal service providers. Would an example there be taking an equity stake in a deposition/discovery vendor? The second question on that third bucket on the AI, is an example there potentially Burford purchasing a patent that is somehow related to AI and legal research or the legal world? I would just like to have maybe two tangible examples of those latter two buckets.
Sure. Let me do them in reverse order. On the legal technology side of things, I do not rule anything out in the world, but buying a patent to then try to enforce that patent is not the most logical, is not the most likely outcome of the kind of thing that we are looking at there. When I said in my closing that in any big case, we already are spending a very significant amount of money on legal technology. What I meant by that is if you come to us with a single case to finance from the beginning, what happens in American litigation is you have got a little skirmishing at the front end of a case about, oh, does it state a claim and is there a motion to dismiss and so on. Once you are past that skirmishing, you then go into quite a long period of fact discovery.
That fact discovery starts with documents and then moves on to witnesses. The documents, as all of you know, you're living in a world where all of your keystrokes are captured today. The universe of data that you're creating and that your firm is holding for you, especially if you're an SEC registrant, is absolutely vast. You need to use technology to manage the litigation and manage the process. What will happen today is we'll agree to finance the client. The client will go and hire the law firm. The law firm will go and hire the technology company to provide the technology services for that particular case, which will range from document management to AI review of the documents and so on.
That is why Travis Lenkner said this is being disrupted, the legal industry is being disrupted dramatically because of these technology developments. We are, in fact, today paying for all of that. One tangible example in that bucket would be us taking a position either organically or inorganically in that technology market. That is the AI. In ALFS, the crappy acronym. What those are, those are not the kind of examples that you gave. Those are people who are doing things that brush up to the point of providing legal services. Think about, for example, document review, contract document review, things like that. Josh Wood.
We have a question from the webcast around the use of leverage. Financial leverage is often used to amplify ROE when income comes from relatively predictable returns on assets. It isn't clear that Burford is rewarded by investors for the leverage it has. Should you consider moving toward being debt-free?
Jordan Licht?
No. I think that I haven't been with the business for 15 years, but I can see through the history of the financials that this portfolio can support an appropriate amount of leverage. We've used leverage to grow the business and to continue to invest in assets. I sound like a broken record on that. That is why we're not going to use leverage just for financial engineering to buy back stock. With the portfolio size that we have, while I would like for them to tell me the date of every single case and when it will conclude, we do have visibility through our modeling on a high-level view of expected returns as well as modeling of the cash outflows.
The modeling is not just about when is the money going to be received, but the modeling is also spent to go and see how are the deployments going to come over time. With that, I feel comfortable around our leverage metrics and even taking that slightly higher and continuing to invest in the business.
All the way from London.
Hi, it's Julian Roberts from Jefferies. The very useful slide, I think I was taught 22, showed that over time you're investing more in assets that have a higher modeled total risk of loss. Is there any correlation between the weighted average lifetime that you expect for a higher risk of loss asset or not?
I'm not sure what you're referring to, but I can't answer the question. The answer is yes, because I mean, it depends. There's a couple of different ways to lose, right? You can lose very early on. You saw some of those black bars, like the losses can be quite small. If there's a gating issue you need to get beyond, and once you're beyond it, you're in good shape. That's a little bit like putting in an ante to get a seat at the game. Those won't take long, and the duration wouldn't be any longer than anything else. In fact, it'd be shorter. It'd resolve small loss and move on. To the extent we're talking about taking something all the way to a final trial and appeal, it's going to be hard fought. We don't expect a rapid settlement.
That is going to take longer, but produce potentially much higher returns. I did talk about how the two metrics that determine ROICs as opposed to IRRs, absolute returns, are going to be risk and duration. Often they'll go together. Not in every case, but often they will go together because trials are higher and they take time.
Examples can sometimes be helpful here. Like what John is talking about when we talk about something that happens fast, we might look at a case where the principal issue in dispute is whether a limitations period has been satisfied. As all of you probably know from just watching legal TV, once the statute of limitations has run, you're done. You're home free. You can't pursue the case. That sounds really easy to say, but in fact, every state has its own rules. The federal government has its own rules too. There are many, many, many different pieces of law around limitations. We might take a case where that's the issue. If we're right, that case will probably settle because that's the gating issue. If we're wrong, we're going to lose the cost of the motion to dismiss, and that's it.
That is an example of one of those ideas. From the webcast, and then we will go to you, sir.
All right. We have a question from Alex Bowers of Berenberg. Can you talk a bit about what sort of synergies you could see between your core legal finance business and expanding into broader legal services? For example, do potential initiatives such as law firm equity stakes and legal technology development enhance Burford's ability to acquire new clients or cases?
I'll stick with the example that I gave to this gentleman about a legal technology interest, which is if we start to move into the world of having some interest in legal technology that we are already using in cases, you can pretty easily see a world where we have the opportunity, given how many cases we do, for that particular provider of technology services to have the opportunity to work across our portfolio. It's not that we would dictate who law firms hire, but we can certainly make the case for something that is commercially advantageous to them. And so.
Hi, James Holly with Silver Beach Capital. Thank you for the excellent presentation. This is a question on the investment process and I guess getting better over time, not to critique the results. I think they're excellent and the performance speaks for itself. I think there's probably a delicate balance between spending time on things you know you want to do and then studying the things you didn't do for negative selection bias. Maybe you could speak a little bit about how you improve the process over time. Obviously, you have perfect information on the cases that you have done, but are you also able to augment the data you have with stuff you haven't done and maybe there are rumors or yes.
Yes. That is a good question. We do try to track the things that we turn down or that if occasionally we lose to a competitor to see what happens. It may well be the reason we would lose it is we are unwilling to do it at a particular price because we see more risk. It is always a moment for sort of high-fiving or slapping on the back when you say, oh, you dodged a bullet here. There are matters where we see, oh, it resolved positively, but we were right. It came in much lower than they were predicting, and we would have barely eked out our return on it. It is probably a little less scientific. Like our data set is not going to be as rich or 100% covered because some of them could be confidential arbitrations.
There could be settlements where we don't know the actual number, although we do get some feedback because we generally now know the lawyers. What's very interesting is also the number of times I mentioned before the new IP funders that came into the market and then sort of with a flavor of the month very briefly, and then it went back to us. The number of times we get deals where somebody did go with another funder in a first round of funding some years ago, and then they couldn't raise a second fund. They didn't meet their needs. It wasn't, and they come back to us. We learn a fair bit about how those funders did on their prior deals, and we incorporate that into our learning. We try to do that for sure.
Okay. Thank you. Just second question on maybe the new opportunities and law firm equity and understanding that had one very successful investment. How do you think about potential conflicts of interest, obviously investing in law firm equity while also having them as important customers and clients?
Yeah. I think an important element, and this is also something that is generally speaking the subject of regulatory activity in jurisdictions that do permit law firm equity ownership, is we are passive investors. There is, to use an example, the law firm that we're invested in in the U.K., right now, we have no involvement in the case selection or the management of that law firm. We're a financial investor. I think that the conflict issue doesn't really arise the way the structures work.
Okay. Clients, customers, they accept that answer that you're a silent passive partner?
Yeah, they do. Because again, there's a regulatory overlay here. As Jonathan Molot said, this is not something that is moving with lightning speed. Lots of the hand-wringing that goes around it is because lawyers are very concerned about issues just like that. You get pretty robust rules and protections around these kinds of issues.
Okay. Thank you. Sorry, one final question if I may on regulation of litigation finance politics in general. It sounds like the regulatory situation is improving in Europe and Asia generally, recognizing those smaller markets today. Is there any update maybe on U.S., Canada, U.K., Australia, maybe larger markets of Burford in the past? If there are any regulatory updates, yeah.
Yeah. I think you can probably characterize regulation, first of all, globally, where the regulatory theme is in favor of litigation finance capital as opposed to against it. If you go back to the beginning of this business, there were people who were unhappy with us coming into existence in the first place. Principally large corporate defendants who enjoy a historic advantage by being repeat well-funded litigation players. Jonathan Molot has a whole bunch of scholarship on this as well. Early on, the effort was to actually not have this be permitted. That really has gone away. If you look at the U.S., environment, our largest market, there is not any effort out there to just squash litigation finance, litigation funding at all. Really, the only regulatory issue that is being debated in the U.S., is the extent to which our presence gets disclosed in underlying cases.
That's been a multi-year discussion in the U.S., and it continues to be. Not surprisingly, this is regulation by lawyers. It does not move again with any particularly great speed. We have disclosure rules in lots of other jurisdictions around the world as well. That's the large, that's basically the regulatory dynamic that we are in pretty good shape. In England, there's sort of a footnote that you probably need to add. There was an aberrant U.K., Supreme Court decision a couple of years ago called Packer, which threw into some doubt the recoverability of certain kinds of legal finance contracts. That has thrown the English industry into some degree of turmoil. We were not particularly affected by that given the way we structure our transactions.
That has led to sort of a more global review of litigation financing in the U.K., that is going on right now. I would say in general, the trend is in favor of making capital available because, as I was talking to somebody in the break about this, litigation, believe it or not, is very attractive to governments because it comes with a lot of economic activity that is collateral to the actual litigation case itself. You actually have competition among countries to get litigation volume. The U.K., and Singapore right now, for example, are both quite keen to bring in litigation that is not necessarily about things that are going on in England or in Singapore, litigation tourism almost. We are an important part of that, especially as costs rise.
You see things like in Singapore where Singapore has embraced the availability of legal finance capital, for example.
Okay. Another one from the webcast around YPF. Can you please provide some color on the increase in the YPF stake that you mentioned in 1Q24 through Eden Park?
Sure. Just to remind everybody, most of YPF exists in the Peterson bucket, Peterson being the second largest holder of YPF securities, a Spanish company that went bankrupt. We have since 2015, when we were appointed in that bankruptcy to provide the financing, been financing Peterson's activities. Peterson represents plus or minus 90% of the judgment. The third largest holder of YPF shares was Eden Park, the hedge fund, the New York hedge fund that liquidated over time. We did our first deal with Eden Park, I think in 2016, 2017, something like that. It is actually on the slide if you want to go and check. Eden Park has been slowly liquidating all of its positions since then.
As part of that liquidation process, we have over time been continuing to step up our participation as the rest of the Eden Park assets go away, if you think of it in those terms. Now I think we're down to only two Eden Park assets that are left. Our interest keeps on rising, and we keep on contributing some more capital to the estate as that occurs. We're now up to 82% or something, 83%, something like that.
Can you talk a little bit about the consultative approach to business development with large corporates? Like who engages, how do you figure out what the opportunity is, how do you keep the relationship so that they call you first when something comes up?
Yeah, sure. It really, frankly, is like any complex sale process, it's all over the map. Sometimes you're building the relationship over time, you're educating people, you're working your way up through the process. You might start with some enthusiastic young finance or law person, and they become an internal champion, and you do some education. Sometimes it's the entire opposite. I spent half an hour on the phone yesterday with a really, really senior guy from a huge global company. That was the first, that was where we were starting because they have a giant case, and he was interested and he'd heard about us. We had the conversation. There's not really a single answer to that in much the same way that you wouldn't get a single answer in investment banking or something.
Would it be theoretically helpful if shareholders made warm intros to large corporations?
We're happy with any intro, however we get it. I smile when I say that, but it's a serious point because, as I said before when I was talking about adoption, the challenge fundamentally is the pressures of the day job, if you will. It's been a long time, 25 plus years since I was a general counsel of a big Fortune 50 company. Even 25 years ago when there was less litigation and legal fees were a lot lower, the CFO still hated me. I was expensive in his mind. I was unpredictable. I could never keep to a budget. I could never tell him when's it going to finish and how much is it going to cost because I would always have once upon someone what the other people do and what the court does and so on.
It was never a big enough deal for the CFO to sort of rise to the top of his priority list to the destruction of my little world. It is sort of that way today. As I said before anecdotally, I go and talk to groups of CFOs or CEOs, and not a single person disagrees with the desirability of the solution, but it is not always the priority number one. That is the question for us of the adoption curve.
I'm not going to give you carry.
Thanks, guys. At this point, can you guys talk about the benefits of being publicly traded? Is there any opportunity to roll up, use the currency, roll up, whether it's domestic or abroad inorganically? If that's not the case as you guys pivot into kind of longer duration asset plays through owning individual stakes, does this model actually work better inside a bigger balance sheet? All it's raising money like crazy where maybe they can match their funding with your longer duration profile?
People have probably asked us since 2009 whether we should be public or not. I do not think that we had a particular bias originally. In 2009, we saw an opportunity. It was very timely, and we went and raised capital against the opportunity. We did not go into that saying, "Oh, let's go and raise public capital." We said to some bankers that we knew, "Go raise us some capital." Actually, I thought the most likely outcome would have been a private fund, but it turned out that for a variety of reasons in the middle of the financial crisis, the answer instead was we went public in London. Since then, we have been public. I think as a result, we are lawyers. We say, "Okay, we understand how to do public companies." We have devoted ourselves to building a really good public company.
I get that question all the time from shareholders, and I do not think there is a right answer to it. If somebody would like to buy us and take us private, we are happy to have that conversation. Until that happens, we are happy to be public and continue to drive shareholder value. That is sort of where we are. I think we do not have any particularly emotional view about the issue.
Are there opportunities to roll up, though? Any other side of that?
The question, in case it did not get picked up in the webcast, is, are there roll up opportunities? In the pure legal finance space, we have made one acquisition, one direct acquisition in 15 years in that space. That was in 2016 or 2017 of a fund manager. That was a successful acquisition from our perspective. It was at a time when we would have taken a lot longer to organically build the fund management side of the business ourselves. By doing that acquisition in one fell swoop, we were the industry's largest fund manager. That was, I think, a desirable thing. I would do that acquisition again if presented with the same opportunity. However, with that acquisition in our pocket, we then were and probably still are the industry's largest fund manager. We got $3 billion of AUM still today.
I do not know that there is a lot of value in me rolling up the next existing player who is a lot smaller than we are and probably does not add a lot to our book. We have always said if there was something expansion oriented, this is pure hypothesis, but if we really wanted to be in country X and we were not in country X today and somebody had developed a really good player in country X, could we think about that? Sure. We never rule anything like that out. I do not think that the right conclusion would be that we are public only to have a roll up currency. I think the conclusion is we are public because we are public. It is how we started life. Nobody has showed up and said, "Well, why do you not do something different?
There are. Christopher Bogart, I was going to add, there are benefits in the capital markets when raising debt to be able to say that we're public. I think that's been accretive to the investor base and growing the debt investor base. I think to the originators over there, it's very easy when someone doesn't actually know or understand this business to say, "Here's a public 15-year track record where they can actually see what we've done and who we are.
They know we'll be around over the course of it to support their needs.
We have a webcast question.
All right, from the webcast, can you elaborate a little more on your strategy going forward for the asset management business and how you use third-party capital in this asset class?
Sure. We have been pretty public with our views about this over time, starting back in maybe 2021 or so. Going back to the prior question about the alts as well, one of the issues with these assets is that they do not scale on a capital investment basis in the same way that lots of other asset types do. In other words, when we find something we like, we are relatively constrained in how much capital we can put to work in that thing because either it is a legal fees financing thing and the fees are what they are, or the risk associated with the underlying asset is sufficient that our tolerance level for putting a monetization piece of capital to work is finite, as Jonathan Molot said earlier. To grow the business and only earn 2 and 20 style returns, you have to do a lot more business.
You've seen one of our competitors try to do this, try to move to a capital light asset management model and completely fail at it because they just were not able to scale enough to make up for the loss of what is effectively the balance sheet capital. In round numbers, we keep about 75% net of capital costs of the profits that we generate from investments today, whereas in a 2 and 20 model, we would keep about a quarter of them. We would have to basically, on the same OpEx base, build the business to be three times larger to just run in place. That being said, we've got a long-term relationship with a big sovereign wealth fund that we like that has different and better economics than that for us. We're perfectly happy.
This is not a categorical statement of, "Never again will we do asset management," or, "We love asset management." Again, like so many things in this business, we are on a spectrum about it. We are at 10 of 1, and we are about to be out of Q&A time. We have another webcast question. If people in the room have questions, we are happy to continue to talk to you afterwards.
Okay. The output of your probabilistic model suggests a ROIC of 110% compared to your historic ROIC of 87%. Can you talk a bit about the primary drivers of why future returns might be better than historic returns? Is it because you've allocated to higher risk return cases, allocated more to larger cases that might generate larger returns, or because you have made changes to your pricing approach, or lastly, because your win rate is getting better?
There were a few potential explanations, a couple of which were the good ones. Rather than go through and say, "Yes, no, yes, no," I'll just pick those. Which is, one thing is, remember I said when things resolve earlier, the ROICs are lower. When they resolve later, they're higher. When they go to trial, they're higher. And when they settle on the eve of trial, they're higher. We experienced a tremendous amount of growth between 2015 and 2020. Remember the 870 something I put of blue bars on that slide before. It is not surprising that to the extent some of those resolved despite COVID through settlement, that larger hump is going to produce ROICs that are lower than what we're projecting for the future as the rest conclude and they're more mature vintages.
I mean, you might say it's a little bit, remember Christopher Bogart talked before about smoothing out earnings. If we had stayed just doing $5 million deals, it would all be smooth. We didn't do that. We grew. We scaled significantly in those years. And then COVID hit and held it up. One might say, "How can you say the best is yet to come? Isn't the past record?" I've shown you why historically later results generate higher returns than earlier ones. We've seen growth pre-COVID that really changed the nature of the portfolio. I think that's the best explanation. You look at 2024, it was 110%. It's right on or 111. I can't remember what the number was in that ballpark. We're right on track with that.
As you can probably tell, we love the business and like to talk about it. We were previously paid by the hour to talk. We recognize that we're pushing up against four hours of your time. We are going to stop the formal proceeding there. As I said, if anyone wants to come and chat with us, we're happy to be here for a coffee and engage with you more. For those on the webcast, thank you again very much for joining us. We really appreciate your time and attention, especially on a sloppy and difficult day in the markets. We look forward to talking to you as we take the business forward.