Tetragon Financial Group Limited · EURONEXT:TFG
Tetragon Financial — FY2020 Earnings Presentation
26 slides from Tetragon Financial's earnings presentation, Feb 26, 2021
Slide 1: Tetragon Financial Group Limited 2020 Annual Report Investor Call
Tetragon Financial Group Limited 2020 Annual Report Investor Call 26 February 2021 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 2020, UNLESS OTHERWISE STATE
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 2020 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% 10.3% 9.0% 9.5% 8.5% 2016 2017 2018 2019 2020 (i) Please refer to Endnotes on page 23 for certain relevant definitions. Source: Tetragon. 2020 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: 12.1% 13.4% 12.1% 8.9% 7.6% 6.3% 2016 2017 2018 2019 2020 (i) Average RoE is calculated from Tetragon’s IPO in 2007. Tetragon seeks to deliver 10-15% RoE per annum to shareholders. Tetragon’s returns will most li
Slide 5: Key Performance Metrics: Dividends Per Share (DPS)
Key Performance Metrics: Dividends Per Share (DPS) $0.74 $0.72 $0.70 $0.6725 $0.40 2016 2017 2018 2019 2020 Source: Tetragon. 2020 Annual Report Investor Presentation | 5
Slide 6: Year-on-Year NAV Progression
Year-on-Year NAV Progression(i) 28.00 27.50 (1.22) 27.00 26.50 (0.07) (0.49) 3.20 26.00 0.92 (0.53) 25.50 25.00 26.57 24.50 24.00 24.76 23.50 23.00 NAV at 31 Investment Operating Interest Dividends Other share Share NAV at 31 December income and expenses, expense dilution repurchase December 2019 lo
Slide 7: Tetragon NAV Per Share Total Return and Share Price
Tetragon NAV Per Share Total Return and Share Price Since April 2007 IPO to 31 December 2020 350% 332% 300% 250% 200% 150% 137% 127% 100% 80% 71% 50% 0% Dec-20 – Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Dec-19 Apr-07 Apr-09 Apr-11 Apr-13 Apr-15 Apr-17 Apr-19 Aug-08 Aug-10 Aug-12 Aug-14 Aug-16 Aug-1
Slide 8: Delivering Results Since 2005
Delivering Results Since 2005(i) NAV Per Share Total Return(ii) 9.5% 10.2% 14.6% 11.3% 332% One Year To Five Years Annualised Ten Years Annualised Since IPO Annualised Since IPO 31 December 2020 Investment Returns/Return On Equity (iii) 7.6% 10-15% 12.1% Annual Average 2020 YTD RoE RoE Target Since
Slide 9: Net Asset Composition Summary
Net Asset Composition Summary Net Asset Breakdown at 31 December 2019 Net Asset Breakdown at 31 December 2020 Other equities Other equities Net Cash Private equity in and credit and credit asset management 2% Private equity in companies asset management Private equity Private equity companies and ve
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 2019 Additions(i) Receipts(i) Losses 31 Dec 2020 Private equity in asset management 747.5 12.6 (106.2) 179.6 833.5 companies Event-driven equities, convertible bonds and 532.0 54.0 (61.3) 43.
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 2019 Additions(i) Receipts(i) Losses 31 Dec 2020 % of NAV Private equity in asset management companies Equitix 301.1 9.0 (90.7) 166.7 386.1 15.6% BentallGreenOak 190.8 3.1 (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 Disposals/ Gains/ NAV at Asset Classes 31 Dec 2019 Additions(i) Receipts(i) Losses 31 Dec 2020 % of NAV Event-driven equities Polygon European Equity Opportunity 258.7 18.4 (0.4) 23.2 299.9 12.1% Fund A
Slide 13: Bank loans
Bank loans In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2019 Additions(i) Receipts(i) Losses 31 Dec 2020 % of NAV Bank loans U.S. CLOs (LCM) 190.5 - (31.5) (24.2) 134.8 5.4% TCI III 70.4 14.1 (12.4) 3.9 76.0 3.1% TCI II 59.0 - (7.4) (3.2) 48.4 2.0% U.S. CLOs (non-
Slide 14: Real estate
Real estate In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2019 Additions(i) Receipts(i) Losses 31 Dec 2020 % of NAV Real estate BentallGreenOak Europe funds & co-investments 69.0 5.7 (46.1) 9.8 38.4 1.6% BentallGreenOak U.S. funds & co-investments 64.0 8.0 (1.5) (2
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 2019 Additions(i) Receipts(i) Losses 31 Dec 2020 % of NAV Private equity and venture capital Hawke's Point Fund 1 81.1 7.7 (11.0) 53.2 131.0 5.3% Banyan Square Fund 1 15.0 24.1 (2.9) (
Slide 16: Other equities & credit; cash
Other equities & credit; cash In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2019 Additions(i) Receipts(i) Losses 31 Dec 2020 % of NAV Other equities & credit(ii) Other equities 185.5 36.6 (29.4) 47.8 240.5 9.7% Other credit 29.1 1.2 (10.4) (2.0) 17.9 0.7% Cash Net
Slide 17: Future Investment Expectations
Future Investment Expectations(i) TFG Asset Management Expect to be investing in Contingency Capital Event-driven equities = Stable allocation Convertible Bonds = Stable allocation Other hedge funds Expect additional allocations in 2021 Bank loans = Stable allocation; will commit to TCI IV but T
Slide 18: Q&A
Q&A Contact us anytime: ir@tetragoninv.com 2020 Annual Report Investor Presentation | 18
Slide 19: Share Repurchases & Dividend Distributions
Share Repurchases & Dividend Distributions $1,451.7 $1,365.0 $1,248.3 $1,183.2 $741.5 $705.2 $573.6 $638.7 $659.9 $710.2 $609.6 $609.6 Inception - 2017 2018 2019 2020 Cumulative Share Repurchases ($MM) Cumulative Dividends Paid ($MM) ♦ Q4 2020 DPS gave annualised dividend yield of 4.2% ♦ Since IPO,
Slide 20: Net Asset Composition Summary at 31 December 2020
Net Asset Composition Summary at 31 December 2020 By Asset Class By Investment Other equities and credit Private equity in Direct asset management GP – private equity in asset management Private equity 10% companies companies and venture 17% GP capital LP external 16% 34% 34% LP internal – investmen
Slide 21: TFG Asset Management – AUM
TFG Asset Management – AUM (i) 31 December 2016 – 31 December 2020 ($billions) $30.1 $28.1 $27.4 $23.0 $19.5 2016 2017 2018 2019 2020 LCM GreenOak BentallGreenOak Polygon Equitix Tetragon Credit Partners TCICM (i) Includes the AUM of LCM, BentallGreenOak, Polygon, Equitix, Hawke’s Point, Tetragon Cr
Slide 22: TFG Asset Management Pro Forma Statement of Operations
TFG Asset Management Pro Forma Statement of Operations(i) Tetragon Financial Group TFG Asset Management Pro Forma Statement of Operations 2020 ($millions) 2019 ($millions) 2018 ($millions) Management fee income 125.8 111.2 85.7 (ii) Performance and success fees 81.6 51.8 24.0 Other fee income 18.9 1
Slide 23: Endnotes
Endnotes Page 3 Page 7 (i) NAV Per Share Total Return as of 31 December 2020 since Tetragon’s initial public Certain definitions: offering in April 2007. Tetragon uses the following metrics, among others, to understand (ii) Total shareholder return to 31 December 2020, defined as share price appreci
Slide 24: Endnotes
Endnotes Page 8 (i) Tetragon commenced investing as an open-ended investment company (i) 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 to
Slide 25: 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 26: 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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