RCS - Tetragon Financial - Edison issues review on Tetragon Financial Group

Tetragon FinancialAnnouncement

30/08/2022 08:45

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RNS Number : 5660X  Tetragon Financial Group Limited  30 August 2022

London, UK, 30 August 2022

 

Edison issues review on Tetragon Financial Group (TFG)

Tetragon Financial Group's (Tetragon's) NAV declined 3.5% in H122 in total
return terms, compared to a 20% fall in the MSCI ACWI Index (based on
Refinitiv). The portfolio revaluation contributed 4.1pp to the decline, which
was mostly due to a Q122 loss on Tetragon's direct exposure to a publicly
quoted biotech company and the downward revaluation of Equitix on the back of
public multiples contraction. The best-performing assets in the portfolio were
collateralised loan obligations (CLOs, which also assisted the valuation of
the CLO manager LCM). Tetragon's NAV total return was also supported by a
NAV-accretive share repurchase (+3pp on NAV). Tetragon's one-year NAV
performance to end-June 2022 stands at 10%, compared to a 15% decrease in the
MSCI ACWI (based on Refinitiv).

 

At end-June 2022, Tetragon had cash commitments of US$96.5m, which are fully
covered by the undrawn part of its credit facility (US$150m). The facility has
been enlarged recently to US$400m from US$250m, with the drawn part
translating into net gearing at 3.7% of NAV at end-June 2022. We also note
that Tetragon receives recurring cash inflows from bank loan investments and
TFG Asset Management, with a five-year average of US$115m and US$69m pa,
respectively. Tetragon's average costs excluding incentive fees stood at
US$49m pa over the last five years. In H122, Tetragon used US$42m for share
repurchases close to market price and paid US$19.2m in dividends and we
calculate that the latest dividend per share (DPS) of US$0.11 (up 10% y-o-y)
implies a 4.3% yield, according to our calculations.

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