BUR, page-12

Jimmy_C have you given any thought to the symmetry or perhaps the asymmetry of risk in these closed funds?

The Partner's Funds are talked of in BUR:L as if a spring eternal of almost guaranteed returns. But this is not the case. Litigation can & does fail. Even in aggregate.


I imagine the first defence or strategy is the clustering of multiple cases, So were IMF-Bentham's average case investment size of about AUD $60m with a 15% fee (on average) and a ROIC in excess of 50% plus so say a AUD $6m or there about - capital per case by IMF-Bentham.

Burford's Partners Funds are in the region of USD $400m (say AUD $530m), so with that sort of imprecise metric roughly 88 - 90 cases will preferably be tied into a single fund. A guess only. Through Fortress' USD $150 & IMF-Bentham's USD $50m the Fortress Vehicle will be smaller by half.

Are they relying on some sort of Markowitz 'portfolio of cases' risk reduction math, as was used in the consolidated debt obligations, that in some large measure lead to the financial crunch in 2007, to mitigate risk ?

If (in the unlikely event) a fund derives no NET income, from 40 cases - is this risk purely at the risk of the Fund investors?

As we have seen in IMF-Bentham, there sadly protracted times when the winds of judicial outcome can blow hard, and persistently on the nose?

What then?