TFG’s investment objective is to generate distributable income and capital appreciation, aiming to provide stable returns to investors across various credit, equity, interest rate, inflation and real estate cycles. TFG’s investment portfolio comprises a broad range of assets, including a diversified alternative asset management business, TFG Asset Management, and covers bank loans, real estate, equities, credit, convertible bonds and infrastructure.
Tetragon Financial Group (TFG) delivered a strong relative performance in H118, with its +4.4% NAV total return comparing with the -0.1% and -0.7% US dollar total returns of the MSCI AC World and FTSE All-Share indices. The portfolio has been substantially diversified away from collateralised loan obligations (CLOs – now only 16% of NAV) across a range of other alternative asset classes in recent years, accompanied by lower returns. However, with positive returns from all but one asset class in the half year, Tetragon’s return on equity (ROE) moved up to an annualised 10.5% in H118, back within its long-term 10-15% pa target range. Recent discount widening appears inconsistent with Tetragon’s NAV performance, as well as its progressive dividend and peer group-leading 5.5% yield.