Matthew Howlett: Makes complete sense. And thank you for clarifying that. Last question, I want to get two in here. But first, do you plan on updating the embedded realized gains of the portfolio ex-YPF? Are you going to do that annually for us, or when should we expect that time wise? And then the second question, with your cash build and the laddered maturities and the extension of the SWF arrangement, how do you think about capital return? You want to reinvest, clearly you’re getting 30% returns. Do you think about the dividend? Do you think about buybacks? Does that enter into the equation with how well the balance sheet is positioned today?
Christopher Bogart: Yeah. Jordan, do you want to take those?
Jordan Licht: Sure. So the first one, I think, was about the kind of portfolio value, second capital return. On the overall portfolio value and expected cash flows, I think we mentioned this before, and as part of the kind of revision to our valuation policy around the restatement process, it’s not really appropriate to be putting out kind of different metrics with respect to a potential value metric that’s differing from our fair value. So I think at this point, we’re not going to be publishing out kind of that summary view of total cash flows. The — with respect to then capital return, I think, look, we’ve talked about this a lot with respect to what we’re going to do as we continue to see cash come back to the balance sheet.
I think first and foremost, our focus is to continue to invest in 30% plus IRR assets. And we think that that brings long-term growth to our shareholders and to the balance sheet and compounds on a continuous basis. Will we look to do some form — to the extent we get clarity around the YPF capital and that return, I think Chris has also spoken to that continuously about. We’ll have visibility at that moment in time and in which all options are on the table with respect to both capital return, reinvesting in the business, liability management and so forth. So, hopefully, that answered everything. But if I missed one of the sub questions, let me know.
Matthew Howlett: No, you answered it perfectly and I appreciate it. Thank you.
Christopher Bogart: Great, thank you. So we’ve got a webcast question now from Trevor Griffiths. Legacy asset recovery incentive compensation appears to include a substantial cash component, with only one legacy asset remaining under this deal. Are you happy the individuals benefiting from this arrangement are sufficiently incentivized to continue their good work for Burford once this has paid out in full. So the background to this, just to remind people, is when we acquired the asset recovery business, which is now quite some time ago, perhaps 2015, if I’m not mistaken, we did so on what was basically a very, very small upfront cash payment because Burford was at the time much smaller and younger than it is today and didn’t want to be writing big M&A checks.
So we made a very small cash payment to acquire the business and then provided a back end associated with some case activity. And the nature of the litigation process when you — extended by the pandemic, has meant that some of those cases have taken a long time to come to fruition. And, Trevor, you’re correct that there’s only one left now, but that case has been quite successful thus far, which is why you’ve seen accruals and increases in its fair value gain. As to what the future holds for people, I am but a speculator, but I’ll say that we’ve got a very strong asset recovery team. And I think Burford is delighted with the position in the business, and we’ve now moved to the place where we probably weren’t ten years ago, where I don’t think that Burford as an institution is dependent on any single human being, whether that’s Jon or me or anybody else in the business.
I think we’ve got a very deep bench here of people and abundant resources to carry this business forward. At the same time, I’m not sure that anyone really intends to go anywhere, and certainly Jon and I are not intending to go anywhere in the foreseeable future. We really both love what we’re doing and really enjoy this business. Now, I think we’ve got a question on the phone.
Operator: Thank you. We have a phone line question from Julian Roberts of Jefferies. You may proceed with question, Julian.
Julian Roberts: Hi. Thank you. I’ve got a couple if that’s all right. One is, what kinds of things could we sort of think about — how could you innovate more? And one of the things that Burford has done that perhaps most of your competitors and peers haven’t is do novel things. Would you ever go back to doing class actions? I think you once looked at one in Australia, and I noticed there are a couple in the American news which might possibly be of the right kind of size. Or would you maybe go more directly into the practice of law or anything like that? And then the other one, which is really just my own interest. It looked like the fair value gain relating to the Q1 judgment was a bit smaller by about $90 million than the Q3 judgment.
And that implies, potentially, that the winning of the litigation at trial was less of a value event than the confirmation that the award was going to be at the top end rather than the — rather — well, it’s going to be the upper, not the lower kind of potential outcome. And so, is that the case or is it just that for the first one, you were working off an already high base because of the marks taken in 2019?
Christopher Bogart: I’ll do them in reverse order. So I think the answer on the valuation question is pretty simple. Winning cases is excellent and we obviously love it. But it’s only once you get the numbers that you really know what has happened. And as you may recall, when we went to trial in July on the YPF case, even though we had won in March, the summary judgment, there was an extremely wide range of potential damages. Argentina was arguing for potential damages in the $4.8 billion or $4.9 billion range, whereas we were arguing for them in the $16 billion range. And so, with that level of unresolved uncertainty, I think you need to be pretty prudent about how you take on values. We knew it was going to be a significant award, but we didn’t know how significant it was going to be.
