- Fully Diluted NAV per Share: $31.50 at June 30, with a total return of 1.9% for the first half of 2024.
- Annualized NAV per Share Total Return Since IPO: 10.3%.
- Return on Equity (ROE) for H1 2024: 1.3% net of all fees and expenses.
- Average ROE Since IPO: 11%.
- Dividend Declared for Q2 2024: $0.11, totaling $0.22 year to date.
- Dividend Yield: Approximately 4.3% based on the quarter-end share price of $10.30.
- Shareholder Returns via Tender Offer: $25 million returned during H1 2024.
- Investment Income Impact on NAV per Share: Increased by $0.82 per share.
- Operating Expenses and Fees Impact on NAV per Share: Reduced by $0.26 per share.
- Interest Expense Impact on NAV per Share: Reduced by $0.14 per share.
- Gross Dividends Impact on NAV per Share: Reduced by $0.22 per share.
- Net Dilution Impact on NAV per Share: $0.40 per share.
- Share Repurchases Impact on NAV per Share: Increased by $0.57 per share.
- Aggregate Investment Performance for H1 2024: Gross profit of $73 million.
- TFG Asset Management Gains: $92 million.
- Hedge Fund Strategies Loss: $2 million.
- Bank Loans through CLOs Loss: $12 million.
- Real Estate Loss: $5 million.
- Private Equity and Venture Capital Gain: $29 million.
- Legal Assets Gain: $2 million.
- Other Equities and Credit Loss: $32 million.
- Cash at Bank Balance as of June 30: $7 million.
- Net Cash Balance: Negative $365 million.
- Credit Facility: $400 million with $300 million drawn as of June 30.
Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tetragon Financial Group Ltd (LSE:TFG, Financial) achieved a NAV per share total return of 1.9% for the first half of 2024, with an annualized NAV per share total return of 10.3% since its IPO.
- The company declared a dividend of $0.11 for the second quarter, representing a yield of approximately 4.3% based on the quarter-end share price.
- TFG Asset Management, the private equity holdings in asset management businesses, recorded an investment gain of $92 million during the period.
- Tetragon's investment in Equitix made a gain of $77 million, driven by higher valuations and dividend income.
- The company has returned approximately $1.7 billion to investors through dividends and share repurchases since inception.
Negative Points
- The NAV per share total return for the first half of 2024 was below the company's long-term target and most equity market indices.
- Hedge fund strategies, event-driven equities, and convertibles and credit lost $2 million in aggregate in the first half.
- Bank loans through CLOs recorded a loss of $12 million in the first half of 2024.
- Real estate investments had a loss of $5 million during the first half, mainly from US-focused funds.
- The segment of other equities and credit generated a loss of $32 million during the first half of 2024.
Q & A Highlights
Q: Can you provide an overview of Tetragon's financial performance for the first half of 2024?
A: Paul Gannon, CFO, reported that the fully diluted NAV per share was $31.50 as of June 30, with a NAV per share total return of 1.9% for the first half. The ROE was 1.3%, and a dividend of $0.22 was declared year-to-date. Tetragon also returned approximately $25 million to shareholders through a tender offer in April.
Q: How has Tetragon's asset composition changed in the first half of 2024?
A: Paddy Dear, Co-Founder, noted that private equity and venture capital exposure increased to 18% from 16%, while bank loans decreased to 6% from 8%. The private equity and asset management companies' share grew from 44% to 45%.
Q: What were the key drivers of Tetragon's investment performance in the first half of 2024?
A: Stephen Prince, CEO, highlighted that TFG Asset Management recorded a gain of $92 million, driven by investments in Equitix and BGO. Private equity and venture capital investments generated gains of $29 million, while hedge fund strategies and bank loans experienced losses.
Q: Can you elaborate on the performance of Tetragon's private equity investments?
A: Stephen Prince explained that mining finance investments managed by Hawke's Point generated a gain of $29 million. Banyan Square's portfolio companies faced challenges due to a weaker macro environment, resulting in a loss of $1.3 million.
Q: What are Tetragon's future investment expectations?
A: Stephen Prince stated that Tetragon expects stable allocations in hedge funds, CLOs, and real estate. Private equity allocations are expected to grow, and Tetragon will continue funding commitments to Contingency Capital vehicles. There is potential for new asset class allocations, but nothing specific to report at this time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
