Tetragon Financial Group Limited · EURONEXT:TFG
Tetragon Financial — FY2021 Earnings Presentation
27 slides from Tetragon Financial's earnings presentation, Mar 7, 2022
Slide 1: 2021 Annual Report Investor Call
Tetragon Financial Group Limited 2021 Annual Report Investor Call 7 March 2022 THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE ANY SECURITY OF TETRAGON. THIS INFORMATION IS CURRENT ONLY AS OF 31 DECEMBER 2021, UNLESS OTHERWISE STATED. T
Slide 2: Contents
Contents Key Performance Metrics 3 NAV Progression 6 Net Asset Composition Summary 9 Investment Performance 10 Future Investment Expectations 17 Q&A 18 2021 Annual Report Investor Presentation | 2
Slide 3: Key Performance Metrics: NAV Per Share Total Return
Key Performance Metrics: NAV Per Share Total Return 13.6% 9.5% 10.3% 9.0% 13.6% 14.1% 10.3% 9.0% 9.5% 2017 2018 2019 2020 2021 (i) Please refer to Endnotes on page 23 for certain relevant definitions. Source: Tetragon. 2021 Annual Report Investor Presentation | 3
Slide 4: Key Performance Metrics: Return on Equity (RoE)
Key Performance Metrics: Return on Equity (RoE) (i) ♦ Target RoE: 10-15% ♦ Average RoE: 12.5%% 17.3% 13.4% 12.1% 8.9% 7.6% 2017 2018 2019 2020 2021 (i) Average RoE is calculated from Tetragon’s IPO in 2007. Tetragon seeks to deliver 10-15% Return on Equity (RoE) per annum to shareholders. Please r
Slide 5: Key Performance Metrics: Dividends Per Share (DPS)
Key Performance Metrics: Dividends Per Share (DPS) $0.74 $0.70 $0.72 $0.40 $0.41 2017 2018 2019 2020 2021 Source: Tetragon. 2021 Annual Report Investor Presentation | 5
Slide 6: Year-on-Year NAV Progression
Year-on-Year NAV Progression(i) 34.00 32.00 (1.82) (0.06) 30.00 (0.40) 6.38 (0.81) 28.00 26.00 29.86 24.00 26.57 22.00 20.00 NAV at 31 Investment income Operating Interest expense Dividends Other share NAV at 31 December 2020 and losses expenses, dilution December 2021 management and incentive fees
Slide 7: Tetragon NAV Per Share Total Return and Share Price
Tetragon NAV Per Share Total Return and Share Price(i) Since April 2007 IPO to 31 December 2021 400% 393% 350% 300% 250% 200% 182% 150% 113% 100% 112% 76% 50% 0% Aug-08 Aug-10 Aug-12 Aug-14 Aug-16 Aug-18 Aug-20 Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Dec-19 Dec-21 Apr-07 Apr-09 Apr-11 Apr-13 Apr-1
Slide 8: Delivering Results Since 2005
Delivering Results Since 2005(i) NAV Per Share Total Return(ii) 14.1% 11.3% 12.3% 11.5% 393% 2021 Full Year Five Years Annualised Ten Years Annualised Since IPO Annualised Since IPO Investment Returns/Return On Equity (iii) 17.3% 10-15% 12.5% Annual Average 2021 RoE RoE Target Since IPO Dividends(iv
Slide 9: Net Asset Composition Summary
Net Asset Composition Summary Net Asset Breakdown at 31 December 2020 Net Asset Breakdown at 31 December 2021 Other equities and credit Other equities and credit Private equity in Legal assets asset management Private equity 1% companies and venture Private equity 10% capital 8% Private equity in an
Slide 10: Net Asset Breakdown Summary
Net Asset Breakdown Summary In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2020 Additions(i) Receipts(i) Losses 31 Dec 2021 Private equity in asset management 833.5 10.9 (30.3) 442.2 1,256.3 companies Event-driven equities, convertible bonds and 568.2 54.0 (50.0) 13
Slide 11: Private equity in asset management companies
Private equity in asset management companies In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2020 Additions(i) Receipts(i) Losses 31 Dec 2021 % of NAV Private equity in asset management companies Equitix 386.1 3.3 (12.6) 348.8 725.6 25.3% BentallGreenOak 195.7 1.2 (1
Slide 12: Event-driven equities, convertible bonds and other hedge funds
Event-driven equities, convertible bonds and other hedge funds In millions of U.S. dollars NAV at Additions( Disposals/ Gains/ NAV at Asset Classes 31 Dec 2020 i) Receipts(i) Losses 31 Dec 2021 % of NAV Event-driven equities Polygon European Equity Opportunity 299.9 - (27.0) 4.1 277.0 9.7% Fund Abso
Slide 13: Bank loans
Bank loans In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2020 Additions(i) Receipts(i) Losses 31 Dec 2021 % of NAV Bank loans U.S. CLOs (LCM) 134.8 30.9 (35.7) 24.2 154.2 5.4% Tetragon Credit Partners funds 129.7 - (32.5) 20.6 117.8 4.1% U.S. CLOs (non-LCM) 14.3 -
Slide 14: Real estate
Real estate In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2020 Additions(i) Receipts(i) Losses 31 Dec 2021 % of NAV Real estate BentallGreenOak Europe funds & co-investments 38.4 8.8 (8.5) (0.2) 38.5 1.3% BentallGreenOak U.S. funds & co-investments 45.7 11.6 (0.4)
Slide 15: Private equity and venture capital
Private equity and venture capital In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2020 Additions(i) Receipts(i) Losses 31 Dec 2021 % of NAV Private equity and venture capital Hawke's Point funds & co-investments 131.0 6.0 (39.7) (39.4) 57.9 2.0% Banyan Square funds
Slide 16: Legal Assets
Legal Assets In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2020 Additions(i) Receipts(i) Losses 31 Dec 2021 % of NAV Legal Assets Contingency Capital funds - 29.7 - 0.6 30.3 1.1% (i) Any gains or losses on foreign exchange hedging instruments attributable to a part
Slide 17: Other equities & credit; cash
Other equities & credit; cash In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2020 Additions(i) Receipts(i) Losses 31 Dec 2021 % of NAV Other equities & credit(ii) Other equities 240.5 60.2 (61.0) (24.2) 215.5 7.5% Other credit 17.9 - (4.0) 6.2 20.1 0.7% Cash Net cas
Slide 18: Future Investment Expectations
Future Investment Expectations(i) TFG Asset Management Continue funding commitments to Contingency Capital Event-driven equities = Stable allocation Convertible Slight reduction bonds Other hedge funds = Stable allocation Bank loans = Stable allocation; will invest via Tetragon Credit Partners v
Slide 19: Q&A
Q&A Contact us anytime: ir@tetragoninv.com 2021 Annual Report Investor Presentation | 19
Slide 20: Share Repurchases & Dividend Distributions
Share Repurchases & Dividend Distributions $1,450.6 $1,487.4 $1,364.0 $1,247.2 $741.5 $778.3 $705.2 $638.7 $658.8 $709.1 $709.1 $608.6 Inception - 2018 2019 2020 2021 Cumulative Share Repurchases ($MM) Cumulative Dividends Paid ($MM) ♦ Q4 2021 DPS gave annualised dividend yield of 4.8% ♦ Since IPO,
Slide 21: Net Asset Composition Summary at 31 December 2021
Net Asset Composition Summary at 31 December 2021 By Asset Class By Investment Other Litigation equities Finance and credit Direct Private equity 1% GP – private equity in asset management and venture LP external companies capital 8% 10% Private equity in 11% asset management 7% LP internal – invest
Slide 22: TFG Asset Management – AUM
TFG Asset Management – AUM (i) 31 December 2017 – 31 December 2021 ($billions) $37.1 $30.1 $28.1 $27.4 $23.0 2017 2018 2019 2020 2021 LCM GreenOak BentallGreenOak Polygon Equitix Tetragon Credit Partners TCICM (i) Includes the AUM of LCM, BentallGreenOak, Polygon, Equitix, Hawke’s Point, Tetragon Cr
Slide 23: TFG Asset Management Pro Forma Statement of Operations
TFG Asset Management Pro Forma Statement of Operations(i) Tetragon Financial Group TFG Asset Management Pro Forma Statement of Operations 2021 ($millions) 2020 ($millions) 2019 ($millions) Management fee income 143.4 125.8 111.2 Performance and success fees(ii) 59.6 81.6 51.8 Other fee income 24.0 1
Slide 24: Endnotes
Endnotes Page 3 Page 7 (i) NAV Per Share Total Return as of 31 December 2021 since Tetragon’s initial Certain definitions: public offering in April 2007. Tetragon uses the following metrics, among others, to understand the progress and performance of the business: (ii) Total shareholder return to 31
Slide 25: Endnotes
Endnotes Page 8 (i) Tetragon commenced investing as an open-ended investment company (iv) Following the modification to Tetragon's Dividend and Capital Return in 2005, before its initial public offering in April 2007. Policy in 2020 to remove of any specific dividend target payout ratio referenced t
Slide 26: Endnotes
Endnotes Page 20 Assumptions for "By Exposure": (i) (i) Exposure represents the net asset value of (1) the private equity position in the relevant asset management company and (2) investments in funds/accounts managed by that asset management company. (ii) Exposure represents the net asset value of
Slide 27: Legal Disclaimer
Legal Disclaimer This document has been prepared by Tetragon Financial Group Limited, referred to in this report as Tetragon. References to “we” are to Tetragon Financial Management LP, Tetragon’s investment manager. Tetragon is a closed-ended investment company that invests in a broad range of asse
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