Last checked at 
6 Aug 2018 12:44
London, UK, 6 August 2018
Edison issues review on Tetragon Financial Group (TFG/TFGS)
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.
Tetragon's share price discount to NAV has experienced a noticeable widening in 2018 despite its NAV progressing steadily higher. The current 39.9% discount is wider than its 37.8% one-year average, but lower than its three-, five- and 10-year averages of 41.8%, 40.6% and 43.6% respectively. Quarterly dividend distributions continue to rise steadily and Tetragon's 5.5% yield is the highest in its peer group.
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