Report

Tetragon Financial Group - Achieving superior returns from alternative assets

In 2018, Tetragon Financial Group (TFG) proved its ability to generate positive returns from a portfolio of alternative assets against a backdrop of negative returns across more traditional asset classes (including equities, bonds and commodities). Tetragon’s 12.1% return on equity (ROE) in 2018 is well within its long-term target range of 10–15%, and its 10.3% NAV total return compares with the negative 8.9% and 14.8% returns of the MSCI AC World and FTSE All-Share indices, in comparable US dollar terms. While its NAV progressed steadily higher, Tetragon’s share price declined broadly in line with global equity markets in 2018 and its discount reached 48.8% in early January 2019. However, this was turned to an advantage via the recently completed US$50m tender offer, which was 2.3% accretive to NAV per share, and the discount has subsequently narrowed. Maintaining a progressive dividend policy, Tetragon has a sector-leading 5.6% yield.
Underlying
Tetragon Financial Group Ltd.

Tetragon Financial Group is an investment company that invests in assets, including bank loans, real estate, equities, credit, convertible bonds and infrastructure and TFG Asset Management L.P., an alternative asset management business. Co.'s investment objective is to generate distributable income and capital appreciation. Co. provides stable returns to investors across various credit, equity, interest rate, inflation and real estate cycles. Co.'s asset management businesses can operate autonomously, or on the TFG Asset Management L.P. platform. Tetragon Financial Management LP has been appointed the investment manager of Co. As of Dec 31 2017, Co.'s total investment was US$2.01 billion.

Provider
Edison Investment Research
Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts
Gavin Wood

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