Readers who follow Burford Capital (LON:BUR) Burford will know that it has done very well out of two big cases: Petersen and Teinver. I've been trying to work out just how reliant Burford has been on these two interests.

Burford's aggregate income for the two calendar years 2017 and 2018 break down as:

Realised investment gains: $294m
Unrealised gains: $422m
Other income: $ 45m

The original costs of Petersen and Tenvier have been reported as $20m and $13m respectively.

Looking at the RNSs they started selling interests in these two cases from late 2016 (a very small interest in Petersen).

Up to July 2018 Burford had sold 28.75% of its interest in Petersen for $136m - so a realised gain of $130m (136-(20*28.75%)).

And it had sold all its interest in Tenvier for a realised gain of $94m (107-13).

Realised gains (calculated as proceeds less reported original cost) from these two cases in 2017 and 2018 would be a little short of $224m (as a v small stake was sold in late 2016).

In July 2018 Burford sold 3.75% of Petersen for $30m, reporting that priced its original investment at $800m - but after this sale its remaining entitlement was down to 71.25%. Valued at the price achieved in this sale that would be worth $570m, against an original cost of c$14m ($20m @71.25%) - equating to an unrealised gain of $556m.

However, the allocation of gains between realised and unrealised over a two year period can only be accurately done if one knows the fair value at the end of the first year. I don't.

But if Burford applied a fair value of $570m to Petersen at December 2018 it would suggest that the total of recognised and unrecognised gains over the two years to December 2018 of $780m (224+556) - against reported total realised and unrealised gains of $716m.

This suggests that Peterson had not been fully written up. But it does seem that the good figures reported over the last two years may have been largely reliant on just two cases.

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