Tetragon Financial Group Limited · EURONEXT:TFG
Tetragon Financial — Q2 2020 Earnings Presentation
26 slides from Tetragon Financial's earnings presentation, Jul 31, 2020
Slide 1: Tetragon Financial Group 2020 Half-Yearly Report Investor Call
Tetragon Financial Group Limited 2020 Half-Yearly Report Investor Call 31 July 2020 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 30 JUNE 2020, UNLESS OTHERWISE STATED.
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 Half-Yearly 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% 8.5% 9.0% 8.1% 6.4% 4.4% 2.8% (1.9%) 2016 2017 2018 2019 2020 H1 FY (i) Please refer to Endnotes on page 23 for certain relevant definitions. Source: Tetragon. 2020 Half-Yearly 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: 11.8% 13.4% 12.1% 8.9% 6.3% (5.8%) 2016 2017 2018 2019 2020 annualised (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
Slide 5: Key Performance Metrics: Dividends Per Share (DPS)
Key Performance Metrics: Dividends Per Share (DPS) $0.7400 $0.7000 $0.7200 $0.6725 $0.2000 2016 2017 2018 2019 2020 H1 FY Source: Tetragon. 2020 Half-Yearly Investor Presentation | 5
Slide 6: Year-on-Year NAV Progression
Year-on-Year NAV Progression 25.00 24.75 24.50 (0.47) 24.25 (0.21) 24.00 (0.04) 24.76 (0.29) 23.75 0.45 (0.20) 23.50 24.00 23.25 23.00 NAV at 31 Investment Operating Interest expense Dividends Other share Share NAV at 30 June December 2019 income and expenses, dilution repurchase 2020 losses managem
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 30 June 2020 300% 287% 250% 200% 150% 105% 100% 91% 69% 64% 50% 0% Dec-07 Dec-09 Dec-11 Dec-13 Dec-15 Dec-17 Dec-19 Apr-07 Aug-08 Apr-09 Aug-10 Apr-11 Aug-12 Apr-13 Aug-14 Apr-15 Aug-16 Apr-17 Aug-18 Apr-19 Jun-19 (50%) (100
Slide 8: Delivering Results Since 2005
Delivering Results Since 2005(1) NAV Per Share Total Return(2) 3.1% 9.9% 16.3% 10.8% 287% One Year To Five Years Annualised Ten Years Annualised Since IPO Annualised Since IPO 30 June 2020 Investment Returns/Return On Equity (3) -2.9% 10-15% 11.8% Annual Average 2020 YTD RoE RoE Target Since IPO Div
Slide 9: Net Asset Composition Summary
Net Asset Composition Summary Net Asset Breakdown at 31 December 2019 Net Asset Breakdown at 30 June 2020 Other equities Net Cash Private equity in Other equities Net cash and credit asset management and credit Private equity in 2% asset management companies companies Private equity 5% and venture 9
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 30 Jun 2020 Private equity in asset management 747.5 2.7 (61.0) 14.1 703.3 companies Event-driven equities, convertible bonds and 532.0 50.4 (49.6) (50.9)
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 30 Jun 2020 % of NAV Private equity in asset management companies Equitix 301.1 - (52.1) 33.2 282.2 12.5% BentallGreenOak 190.8 2.7 (8.9)
Slide 12: Event-driven equities, convertible bonds, quantitative strategies
Event-driven equities, convertible bonds, quantitative strategies In millions of U.S. dollars NAV at Disposals/ Gains/ NAV at Asset Classes 31 Dec 2019 Additions(i) Receipts(i) Losses 30 Jun 2020 % of NAV Event-driven equities Polygon European Equity Opportunity 258.7 18.4 (0.4) (31.1) 245.6 10.9% F
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 30 Jun 2020 % of NAV Bank loans U.S. CLOs (LCM) 190.5 - (17.5) (28.2) 144.8 6.4% TCI III 70.4 14.1 (3.0) (5.0) 76.5 3.4% TCI II 59.0 - (2.4) (6.2) 50.4 2.2% U.S. CLOs (non
Slide 14: Real estate
Real estate In millions of U.S. dollars Disposals/ Gains/ NAV at NAV at Asset Classes 31 Dec 2019 Additions(i) Receipts(i) Losses 30 Jun % of NAV 2020 Real estate BentallGreenOak Europe funds & co-investments 69.0 0.6 (37.2) 11.6 44.0 1.9% BentallGreenOak U.S. funds & co-investments 64.0 2.5 - (23.8
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 30 Jun 2020 % of NAV Private equity and venture capital Hawke's Point Fund 1 81.1 2.5 - 33.0 116.6 5.2% Banyan Square Fund 1 15.0 - - (6.2) 8.8 0.4
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 30 Jun 2020 % of NAV Other equities & credit(ii) Other equities 185.5 8.9 (27.8) 9.2 175.8 7.8% Other credit 29.1 - (10.7) (1.3) 17.1 0.8% Cash Net cash
Slide 17: Future Investment Expectations
Future Investment Expectations(i) TFG Asset Launch of Banyan Square Partners Management This remains the largest unknown in terms of cash requirements Event-driven equities Stable allocation Convertible Bonds Stable allocation Quantitative strategies Reducing allocation New CLOs: via TCI III
Slide 18: Q&A
Q&A Contact us anytime: ir@tetragoninv.com 2020 Half-Yearly Investor Presentation | 18
Slide 19: Share Repurchases & Dividend Distributions
Share Repurchases & Dividend Distributions $1,408.5 $1,365.0 $1,248.3 $1,183.2 $705.2 $723.5 $573.6 $638.7 $659.9 $685.0 $609.6 $609.6 Inception - 2017 2018 2019 2020 Cumulative Share Repurchases ($MM) Cumulative Dividends Paid ($MM) ♦ Q2 2020 DPS gave annualised dividend yield of 6.5% ♦ Since IPO,
Slide 20: Net Asset Composition Summary at 30 June 2020
Net Asset Composition Summary at 30 June 2020 By Asset Class By Investment Cash Other equities Net cash 5% and credit Private equity in Direct GP – private equity in asset management asset management companies GP companies 5% 16% Private equity 8% 31% LP internal – investments in funds/accounts and
Slide 21: TFG Asset Management – AUM
TFG Asset Management – AUM (i) 31 December 2015-2020 ($billions) $28.1 $27.9 $27.4 $23.0 $19.5 2016 2017 2018 2019 H1 2020 LCM GreenOak BentallGreenOak Polygon Equitix Tetragon Credit Partners TCICM (i) Includes AUM of LCM, BentallGreenOak, Polygon, Equitix, Hawke’s Point, Tetragon Credit Partners a
Slide 22: TFG Asset Management Pro Forma Statement of Operations
TFG Asset Management Pro Forma Statement of Operations(i) Tetragon Financial Group TFG Asset Management Pro Forma Statement of Operations H1 2020 ($millions) H1 2019 ($millions) H1 2018 ($millions) Management fee income 65.4 48.7 41.1 (ii) Performance and success fees 22.2 16.2 3.7 Other fee income
Slide 23: Endnotes
Endnotes Page 3 Page 7 Certain definitions: Label numbers have been rounded. Tetragon uses the following metrics, among others, to understand (i) NAV Per Share Total Return as of 30 June 2020 since Tetragon’s initial public the progress and performance of the business: offering in April 2007. (ii) T
Slide 24: Endnotes
Endnotes Page 8 1. Tetragon commenced investing as an open-ended investment 4. The dividend yield represents the last four quarterly dividends divided company in 2005, before its initial public offering in April 2007. by the TFG NA share price at 30 June 2020. The latest declared dividend is include
Slide 25: Endnotes
Endnotes Page 20 1. Assumptions for "By Exposure": (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 i
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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