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  "documentTitle": "Burford Capital Ltd. (BUR LN)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-08-07 00:00:00",
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  "notes": "The slide uses specific investment examples to argue that the company aggressively marks fair value gains ahead of monetization.",
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      "text": "If Petersen had already been marked at 60% of the subsequent monetization value, then BUR would have needed to net out the $58 million Fair Value Gain against H1 2019 Fair Value Movements.",
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      "text": "Fair Value Gains: $252.9 million",
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      "text": "Had BUR already marked that portion of Petersen up to $100.0 million, which we believe is not an unreasonable assumption, then the period’s gross Fair Value Gains would have been $252.9 million (90.8% of total investment income).",
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      "text": "If Petersen had already been marked at 60% of the subsequent monetization value, then BUR would have needed to net out the $58 million Fair Value Gain against H1 2019 Fair Value Movements. In that scenario, the gross Fair Value Gains BUR booked in the period would have been $210.9 million (76.1% of total investment income).",
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      "text": "An investor skeptical of our analysis might point to BUR’s Financial Reporting and Investment Valuation page, which describes Realized Gains as Proceeds minus Carrying Value (forgetting of course that this does not describe Net Realized Gains):",
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      "text": "IFRS allows BUR to choose whether show the realized gain portion of its investment income as either Proceeds minus Carrying Value or Proceeds minus Invested Capital (with previous Fair Value Gains netted out against current period Fair Value Movements).",
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      "kind": "paragraph",
      "text": "Value Gains on Napo and Desert Ridge show that the company books significant fair value gains on cases ahead of monetizations (of course Napo’s “proceeds” were largely non-cash):",
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      "kind": "quote",
      "text": "“A separate disclosure of realised and unrealised gains or losses from financial instruments classified as at FVPL is not required by IFRS.” — EY",
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      "text": "Footnotes 81 and 82 detailing IFRS disclosure requirements and BUR's reporting page.",
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      "text": "Desert Ridge and Napo investment performance table showing carrying values and proceeds over time.",
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      "text": "How to confirm that Net Realized Gains include previous Fair Value Gains",
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