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HL Select Funds – Burford Capital

HL SELECT UK GROWTH SHARES
HL SELECT UK INCOME SHARES
HL SELECT GLOBAL GROWTH SHARES

HL Select Funds – Burford Capital

Managers' thoughts

Important information - The value of this fund can still fall so you could get back less than you invested, especially over the short term. The information shown is not personal advice and the information about individual companies represents our view as managers of the fund. It is not a personal recommendation to invest in a particular company. If you are at all unsure of the suitability of an investment for your circumstances please contact us for personal advice. The HL Select Funds are managed by our sister company HL Fund Managers Ltd.
Steve Clayton

Steve Clayton - Fund Manager

8 August 2019

Burford Capital shares took a big knock yesterday following the publication of a highly negative piece of commentary by Muddy Waters, a US Hedge Fund.

Muddy Waters have made a range of allegations about how Burford account for the value of the litigation claims they finance, and the capital available to the group.

They have also taken a short position in Burford shares. In other words, they’ve sold shares they borrowed from other investors, in the hope of buying them back for less. So Muddy Waters are incentivised to reduce the value of Burford’s shares.

For their part, Burford have come out fighting, stating that Muddy Waters' critique is without merit. A detailed response is promised and once Burford have briefed investors on their defence, they say that the two founders intend to buy Burford shares for their personal accounts.

What are we doing about it?

Each of the HL Select funds has a position in Burford Capital and we are following events very closely. Once we have been able to review Burford’s detailed response we will set out our thoughts in a blog post.

Important - This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information. Unless otherwise stated performance figures are from Bloomberg and estimates, including prospective yields, are a consensus of analyst forecasts from Bloomberg. They are not a reliable indicator of future performance. Yields are variable and not guaranteed.