Tetragon Financial Group Limited · EURONEXT:TFG
Tetragon Financial — Q3 2012 Earnings Presentation
18 slides from Tetragon Financial's earnings presentation, Nov 5, 2012
Slide 1: Tetragon Financial Group Limited Q3 2012 Results Call
Tetragon Financial Group Limited (“TFG”) Q3 2012 Results Call November 5, 2012 THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE ANY SECURITY OF TFG. THIS INFORMATION IS CURRENT ONLY AS OF 29 OCTOBER 2012, UNLESS OTHERWISE STATED. TFG UND
Slide 2: Legal Disclaimer
Legal Disclaimer This document has been prepared by TFG (together with the Master Fund, the “Company”). TFG is a Guernsey closed-ended investment company whose shares (“Shares”) are listed on Euronext Amsterdam. The Company’s investment manager is Tetragon Financial Management LP (the “Investment Ma
Slide 3: Key Financial Metrics
Key Financial Metrics • Earnings Per Share • Net Asset Value (“NAV”) Per Share • Distributions 2012 | 3
Slide 4: Financial Highlights Report
Financial Highlights Report TETRAGON FINANCIAL GROUP Financial Highlights Quarterly Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Average Net income ($MM) $70.8 $79.2 $53.4 $80.3 $67.3 $88.1 $73.2 EPS ($) $0.62 $0.69 $0.46 $0.69 $0.57 $0.74 $0.63 CLO Cash receipts ($MM) (1) $119.1 $110.0 $102.6 $1
Slide 5: Performance Report by Quarter
Performance Report by Quarter TETRAGON FINANCIAL GROUP Quarterly Statement of Operations as at 30 Sep 2012 Statement of Operations Q3 2012 ($MM) Q2 2012 ($MM) Q1 2012 ($MM) Q4 2011 ($MM) Interest income 59.4 58.3 57.5 55.1 CLO management fee income 5.4 4.4 4.4 4.3 Other income 1.4 1.8 1.3 2.9 Invest
Slide 6: Net Assets, NAV Per Share and Share Price
Net Assets, NAV Per Share and Share Price NAV rose to $1,623.6 million or $14.29 per share at the end of Q3 2012, highest level to date (+3.9% vs Q2 2012) TFG Consolidated Net Assets ($MM) and NAV per Share (i) $1,800 $16.00 $13.12 $13.75 $14.29 $1,600 $12.71 $14.00 $10.69 $10.85 $11.52 $12.06 $1,40
Slide 7: Distributions - Dividends
Distributions - Dividends • TFG declared a Q3 2012 dividend of $0.115 per share, unchanged from Q2 2012 • Inclusive of the Q3 dividend, the rolling 12-month dividend growth rate (year-on-year) was 15.8% Quarterly TFG NAV per Share and Cumulative Dividends per Share (DPS) ($) (i) $16.0 $2.01 $2.12 $1
Slide 8: Distributions - Share Repurchases
Distributions - Share Repurchases • Repurchased 886,721 shares at an aggregate cost of approximately $6.7 million during Q3 • Average price $7.51 per share • 19.4 million repurchased since the inception of the program • Further planned buyback of $150 million announced on October 29 Quarterly TFG Sh
Slide 9: TFG's Net Asset Breakdown
TFG’s Net Asset Breakdown As of the end of Q3 2012: Q3 2012 TFG's Net Asset Breakdown • Total fair value of TFG’s CLO approximately $1.177 Cash Less billion Net – Just over $1 billion US investments Liabilities Real Estate 19.5% – $119 million European exposure Funds • Look-through exposure of appro
Slide 10: TFG and US Market-Wide Trailing 12-Month Default Rate
TFG and US Market-Wide Trailing 12-Month Default Rate • Lagging 12-month corporate loan default rate unchanged at 0.9% annualized • US CLO equity = 0.6% vs. US institutional loans = 1.0% • European CLO equity = 3.3% vs. European leverage loan index = 6.2% Figure 9: TFG and U.S. Market-Wide Trailing
Slide 11: Weighted-Average IRR on CLO Equity Investments
Weighted-Average IRR on CLO Equity Investments • Weighted-average IRRs on CLO equity investments rose to 17.9% vs 17.6% in Q2 • US CLO average IRR increased to 20% • European CLO average IRR rose to 8.1% Weighted-Average IRR on TFG's CLO Investments (i) Weighted-Average IRR on TFG's CLO Investments
Slide 12: TFG's Gross Investment and Operating Cash Flows
TFG’s Gross Investment and Operating Cash Flows • 97% of TFG’s CLO investments passing most junior OC test at end of Q3 2012, weighted by fair value TFG's Gross Investment and Operating Cash Flows ($MM) vs. % of CLOs Passing Junior-Most O/C Tests (i)(ii) 100% 96% 96% 94% % CLOs Passing Junior-Most O
Slide 13: CLO Portfolio Credit Quality
CLO Portfolio Credit Quality ALL CLOs Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Caa1/CCC+ or Below Obligors: 6.40% 5.70% 6.20% 7.00% 7.00% 7.20% 7.60% 8.30% 9.60% 10.50% 11.10% 12.00% 12.60% WARF: 2,605 2,578 2,588 2,624 2,614 2,642 2,664
Slide 14: LCM
LCM LCM Assets Under Management History ($MM) • As of the end of Q3 2012 LCM’s total loan assets under management stood at $3.9 billion (Q2 2012: $4,500 $4.1 billion) $4,086 $3,943 • LCM XII closed October 4, 2012, a $518.25 million $4,000 $3,710 new issue CLO $3,484 $3,399 $3,359 • LCM’s assets und
Slide 15: GreenOak Real Estate
GreenOak Real Estate • GreenOak continued to execute on its business GreenOak Assets Under Management History ($MM) growth strategy, including increasing investor commitments to its funds $2,000 $1,899 • GreenOak’s investment team is actively building a pipeline of interesting opportunities in the $
Slide 16: Loan and CLO Market
Loan and CLO Market TETRAGON
Slide 17: Tender Offer Details
Tender Offer Details • TFG commenced a tender offer today, to purchase a portion of the outstanding non-voting shares for a maximum aggregate payment of $150,000,000 in cash • Deutsche Bank to act as dealer manager • A modified Dutch auction structure to be used • Pricing ranging from $9.25 up to an
Slide 18: Questions & Answers
Questions & Answers TETRAGON
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