London, UK, 24 November 2022
Edison issues review on Tetragon (TFG)
Tetragon Financial Group's (Tetragon's) NAV declined 1.0% in Q322 and 4.5% in 9M22 in total return terms (compared to declines of 6.5% and 26.4% in the MSCI ACWI, respectively). The best performing asset classes in Q322 were TFG Asset Management (driven by BentallGreenOak's revaluation) and private equity (especially funds managed by Hawke's Point). Meanwhile, the other equities and credit asset class (consisting predominantly of listed equity) remains a negative contributor. Tetragon continues its distributions to shareholders, with US$30m ytd in quarterly dividends (declared Q422 DPS stable quarter-on-quarter, implying a 4.6% yield) and US$42m in share repurchases (with a further tender offer of up to US$25m to be conducted in Q422).
While Tetragon was fully invested as at end-September 2022, it still has sufficient resources to continue investments given the US$325m undrawn part of its US$400 credit line. This compares to US$96.5m of outstanding future investment commitments as at end-June 2022. On top of that, Tetragon holds cash-generating assets (eg CLOs and TFG Asset Management), with disposals and receipts in the first nine months of 2022 (9M22) from CLOs at US$69m and a dividend from Equitix at US$17m in Q322. Overall disposals and receipts from the portfolio, net of investments, were US$93.5m in 9M22.
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