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Burford Capital sells investment for record return

The litigation finance group has sold part of its investment in the Petersen Group claims
January 3, 2017

Shares in Burford Capital (BUR) jumped by as much as 11 per cent after it announced the sale of part if its investment in the Petersen Group claims. The price achieved - several millions of dollars - implies a value for Burford's total investment of more than 10 times what it has invested to date. If realised, this investment would be Burford's most successful thus far.

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The Peterson claims relate to the 2012 expropriation by Argentina of a majority interest in New York-listed energy group YPF. The Petersen Group - which had a 25 per cent stake in YPF - went bankrupt after the expropriation. Burford has been appointed to provide finance to the liquidators of Petersen Group.

The litigation finance group is entitled to 70 per cent of the amount recovered from the claims, expected to fall to around 60 per cent after expenses. The implied valuation of the sale may cause an increase in the carrying value of Buford's investment in the Petersen case, which would also increase 2016 income.