Editing Tetragon Financial Group (section)

== Summary<ref name=":2">Edison Investment Research.</ref> ==
'''Tetragon Financial Group (Tetragon) focuses on alternative asset classes offering excess risk-adjusted returns (ie ‘intrinsic alpha’). This includes private equity holdings in alternative asset managers, investments in funds, as well as balance sheet investments in alternative assets. Tetragon posted a 14.1% NAV total return in FY21 in US dollar terms and so far saw only an 0.6% NAV decline in 2022 until end-April. It continues to make distributions to shareholders through NAV-accretive share buybacks (it completed a US$42m tender offer in April 2022) and dividends (with its LTM payout implying a 4.1% yield).'''

'''Cumulative gross returns of Tetragon’s portfolio ex cash (rebased)<ref>Source: Tetragon, Edison Investment Research. Note: *Not adjusted for investments/disposals during respective years.</ref>'''

[[File:Cumulative_gross_returns_of_Tetragon’s_portfolio_ex_cash_(rebased).png|600x600px]]

=== Why invest in Tetragon Financial Group? ===
Tetragon invests in alternative assets with diverse exposure providing returns with low correlation to traditional asset classes. This may be compelling to investors seeking to expand their portfolios beyond traditional bond and equity exposures, for instance into assets benefitting from rising interest rates (eg equity tranches of CLOs) or offering a certain degree of inflation protection (eg real estate). Edison Investment Research also notes that Tetragon-owned asset managers generate recurring fee income, which supports Tetragon’s ongoing costs and distributions.

=== The analyst’s view ===
TFG Asset Management remains the largest asset in Tetragon’s portfolio (45% share of NAV) and management reiterated its intention to at least partially exit this position, with the sale of individual asset managers now more likely than an initial public offering (IPO) of the whole entity. In this context, Edison Investment Research notes that TFG Asset Management’s valuation reflected in Tetragon’s end-April NAV equals c 1.3x Tetragon’s current market capitalisation. Within TFG Asset Management, management considers LCM (valued at 29% of Tetragon’s current market cap) and BentallGreenOak (23% of market cap) as being more mature, while the largest position Equitix (71% of market cap) is still in its growth phase.