Tetragon Financial Group Ltd (AS:TFG) reported a 2.8% NAV total return for H117, with positive contributions made by all asset classes in the portfolio. Although below the target 10-15% range, annualised return on equity for the half year of 7.2% was ahead of the 6.3% achieved in 2016. Tetragon’s share price total return was 7.4% for the six months to end-June 2017, with the discount narrowing by 2.1pp to 36.4% over the period. Dividends continue their steady progression, with the Q217 dividend increased by 4.5% from Q216 to US$0.1750 per share, and Tetragon’s 5.3% dividend yield ranks as the second highest in the Flexible Investment sector.
Steady progress across all asset classes in H117
Tetragon generated fair value net income of US$70.0m in H117, equating to an investment return on equity (ROE) of 3.6%, with a slightly lower 2.8% NAV total return as a result of share dilution, mainly due to the issue of scrip dividends and recognition of additional equity-based compensation shares. The 7.2% annualised ROE is modestly ahead of the 6.3% achieved in 2016 but slightly below the comparable 8.2% ROE in 2015. Total investment gains of US$99.5m in the half year compare with US$68.9m in H116. All asset classes in the portfolio made a positive contribution, with the largest gains generated by TFG Asset Management and CLO investments (which now represent less than 20% of net assets).
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