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Tetragon Fin Share Discussion Threads
Showing 126 to 148 of 150 messages
|Tetragon Financial Group (TFG:NA, or TFG:LN) (5.5% of current portfolio):
Share Price: USD 12.55
Market Cap: USD 1,172 Million
Looking at the longer-term chart, one might presume TFG’s NAV discount has been closing steadily…but in reality, the shares have mostly been tracking NAV higher. After the recent $50 million tender offer, I estimate NAV’s increased to $20.12 per share (all else being equal)…leaving Tetragon trading on a 38% discount to NAV. And stripping out net cash, it actually trades on an ex-cash 50% discount to the value of its investments & asset management platform. Noting TFG’s balance sheet strength, its record of compounding NAV by 15% pa in the last 5 years (& 12% pa since the original 2007 IPO), a generous & progressive dividend policy (which now offers a 5.3% dividend yield), and a history of tender offers & buybacks ($250 million+ in the last 3 years), this valuation makes little sense.
Two main objections are generally cited: The first being Tetragon’s portfolio, which is supposedly chock-full of CLO equity…whereas in reality, CLO equity now amounts to just 24% of NAV, a ratio that continues to fall. The second is management itself – certainly well deserved, based on past history – but TFG now has 24% insider ownership, and management has actually demonstrated consistent alignment with shareholders in the past few years. Quite obviously, growing the asset management business & increasing the share price/NAV has become a far more lucrative proposition now than attempting to gouge shareholders.
Fortunately, technicals confirm this: After trading a tight $9.50-11.60 range for most of the last 4 years, the shares broke decisively higher in December – I wouldn’t be surprised to see a $14 price handle soon (& further progress in due course). Management is also placing increasing emphasis on the AUM growth & earnings of TFG’s alternative asset management platform, currently focused mainly on credit, real estate & infrastructure. AUM has grown (primarily organically) an astonishing 33% pa in the last 4 years, to reach almost $19 billion now – despite the growth focus, it already boasts 30-40% EBITDA margins. Management also dual-listed the shares in London, expanded research coverage, invested more time in dial-in & road-show presentations, and has now begun wooing the business press – the ultimate intention here is to IPO the alternative asset management business.
But I’m also conscious another of my holdings here – Fortress Investment Group (FIG:US), also a cash-rich & under-valued alternative asset manager – is actually TFG’s largest shareholder (controlling a 14-15% stake). I’d actually rate the chances of a merger/takeover here just as likely as an IPO, noting FIG’s long & extensive experience with building investment platforms & spinning out permanent capital vehicles…
For this & other top picks, check/Google my latest 'Top Trumps For 2017...' post on the Wexboy investment blog.|
|Tender $50m when Q3 show net cash over $400m. Tender Price is 10.80 -12.00. NAV is $20 per share. Why would anyone tender cause it defeats me?|
|NAV is now $20 per share with $400m in cash. Last tender offer of $100m was at $10 - must do another another soon.|
|$ denominated. Weak £ and price goes up.|
|Is TFG exposed to Brexit? I think that as its assets are not held in GBP it is protected from any fall in GBP in the remote chance of a Brexit?
It reports in USD.|
|I like as long term hold.
I will not be offering any of my shares.
I look forward to asset value increase as shares bought in at a huge discount.|
|Have held these for few years. Leon Cooperman of Omega is a significant holder and said buy last week as Discount to diluted NAV +45%. Any ideas on tender offer?|
|Listed today as specialist fund in London.
I expect some positive re-rating.|
|I don't hold any of these but I do like RECI very much, so have set up this thread.
Tetragon Financial Group (TFG / U/R / $11.52) December NAV +8.5%
n Pro-forma NAV +8.5%: TFG has reported a pro-forma NAV per share of $14.65 at 31 December 2012. This represents an 8.5% increase from November (November 2012 $13.51 after adjusting for shares in escrow). The NAV increase is due to the impact of the recent $150m tender offer (+$0.65 per share impact) and a portfolio valuation uplift (+$0.60 per share impact) at the end of December.
n Changes to mark-to-model assumptions: A number of changes to the valuation model for the CLO equity investments were made at the end of December. Medium term default assumptions have been reduced for US CLO equity positions to reflect the decline in the maturity wall and marginally increased for Europe to bring them in line with the US.
n Discount rates tightening: TFG has also reduced the applicable discount rates on the projected CLO equity cashflows for both US and European CLO equity investments. US discount rates have reduced to 17.5% for strong deals and 22.5% for other deals (Q3 2012: 20% and 25% respectively). European discount rates have reduce to 27.5% for all deals (Q3 2012: 30%). The discount rates on more recent CLO vintages (2010-2012) are determined by each deal's IRR and the weighted average discount rate was 12.4% at December 2012 (Q3 2012: 12.2%).
n The portfolio valuation uplift in the month is encouraging and we think the amendments to the model assumptions are reasonable considering the robust credit market conditions in 2012. Investors may have concerns over the mark-to-model nature of the portfolio valuation given the lower level of transparency. The process creates a potential conflict of interest for the investment manager due to the quarterly resetting high watermark on the performance fees but we regard the assumptions as conservative. It is the first time any of the model assumptions have been changed since December 2011. During this time the S&P/LSTA Index and the European Leveraged Loan Index returned 9.66% and 9.48% respectively.
n TFG's shares have rerated significantly (+36%) since the company's tender offer announcement in October and the stock now trades on a 21.4% discount to NAV. Our recommendation is currently under review.|
|Must be at least a strong hold now. Whether someone goes for the company or it continues its previous plan of steadily buying up small companies in the same field to keep a 20%+ increase in annual profits going, it looks rather cheap at around £5. A price nearer £6 would seem more appropriate for this rate of growth and the price seems to be ticking up now as, currently, it is £5 - £5.20. One to tuck away for the long term.
Cinven/Candover, now they have both the Wolters Kluwer and Bertelsmann subsidiaries, are not going to sit on them forever. Institutions like this normally want to see an exit within 3-4 years, so they will either continue building to float it off or trade sell it in that time. Now that scientific publishing has had its profile raised and seen to be a good business, there is likely to be more activity.|
|Does anyone have any info as to what is going on??
Lowish volumes and no price change for a few days now, wondered what is happening.|
|It now looks as though the company is in play, after failing to acquire the bertelsmann subsidiary. One of the private equity outfits will surely go for T & F if it isn't Cinven/Candover themselves. No longer a subject for the Bear Club I think. A take out between £6 -£7 would be needed and 3 directors awarded themselves options at 432.5p last week !!|
|Anthony Foye, FD, purchased 10,000 shares today, in the company of other steady buying. This gives good support at this level|
|Good results and still the sysnergy benefits of the CRC purchase to come through|
|With the results due out on Wednesday, analysts have a consensus prediction of £32.5 million of profits (up 20%). With the shares up 4% this morning in a falling market, it appears the market is confident there won't be any disappointments.|
|still good buying going on|
|I don't think so|
|So the rocket should stop going up about now ?|
|420p is 50% retracement of the previous downleg, and was also the previous support. A good place to re-short...|
|Anyone know when this rise will stop ?|
|I think we have seen the end of the drop in TFG. This latest acquisition has cleared the worry that the new CE was not capable of continuing the deals that had gone before. It is immediately earnings enhancing and a perfect fit with existing books and journals in that field. With the results due in 3 weeks it is due to go north of £4 again|
|very large sells going through today.|
|V large sells going through today.|