3/16/2023 0 Comments Aandeel tetragon![]() In Q321 Tetragon reported US$88m in net valuation uplift across its portfolio, of which US$57m was related to TFG Asset Management. Source: Tetragon Financial Group, Edison Investment Research Note: Share in Tetragon’s total NAV indicated in the data labels. Given Tetragon’s relatively limited dry powder at present, these could make up the majority of new investments in the near term (although we note that these commitments may be called gradually). Tetragon had US$125m of hard commitments at end-June 2021 (last available data, mostly towards BentallGreenOak and private equity funds), and a further US$76m ‘soft’ commitments towards Banyan Square and Contingency Capital funds. It has additional capital available from the undrawn part of its revolving credit facility (US$100m at end-September 2021). Historically, Tetragon held meaningful part of its portfolio in cash (2015–2019 end-year average at 14% of portfolio) to have flexibility in capturing investment opportunities. The additional investments translated into an increase in Tetragon’s gearing to 7.4% of NAV (US$190m) from 0.5% at end-2020. Another US$15m was received from TFG Asset Management, mostly from BentallGreenOak (US$13m in the first nine months of 2021). On contrast, the most cash-generative assets were collateralised loan obligations (CLOs) with net distributions of US$40m, which we understand stems predominantly from coupon and amortisation payments rather than disposals (the exposure remained flat at 11% of the portfolio vs end-2020). The largest investments were made in private equity assets (US$74m net) and listed equities and credit: US$27m was invested through Polygon-managed funds and US$15m directly through Tetragon’s balance sheet. The employee ownership of the company increased to 35.0% at end-October (from 32.7% at end-2020).ĭuring the period (10 months to end-October 2021) Tetragon was a net investor, deploying US$75m on a net basis. ![]() Tetragon expensed US$6.0m incentive fees in H121 and a further US$14.4m in Q321 (c 0.8% of opening NAV), equalling to 25% of profit over its hurdle rate (three-month LIBOR +2.6%). This also includes some minor impact of the interest expense on its credit facility (three-month LIBOR+3.25%). The portfolio delivered an 7.9% gross return according to our calculations, which was largely consumed by ongoing costs and fees (2.9pp) and share dilution (2.3pp) stemming predominantly from share-based compensation. The performance continues to fall behind both public and private markets, with the MSCI ACWI and LPX50 indices posting 17.2% and 63.3% TRs, respectively. Tetragon’s NAV per share increased by 2.6% to US$26.85 between end-2020 and end-October 2021 in TR terms. ![]()
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