Tetragon Financial Share Discussion Threads

[makinbuks] 10/12/2020 10:55

So 25% were disappointed so presumably now sell in the market for roughly the same price. Yet if they had sold to the company we holders would have benefited. I reiterate my point that the tender should have been larger. I also note that the share price tends to move in the market to the tender price so if they want to now offer another at $10.50 I'm all for it

[spectoacc] 10/12/2020 08:09

And that's how many wanted out at $9.50 - imagine how many more at eg $10.50, $11.50 etc.

[alpal2] 10/12/2020 08:04

There seems to be little chance of price improvement: Essentially there were $94m in value of shares for sale at $9-50. With only 26.5% being satisfied, there is a huge overhang of shares from those who still want to get out.

The directors don't seem to care that this shows how many shareholders have lost trust in the directors' ability to realise the NAV.

[spectoacc] 10/12/2020 07:51

$9.50, as expected, but a lot more wanted out than were filled.

[alpal2] 01/12/2020 13:40

hpcg: Did I get the TFG dividend? Well, yes and no. I hold 11000 TFG and IG paid me the dividend on 9000 yesterday. I have, of course, asked how it is possible to pay me the dividend on only some of the shares. This has happened before and I never get an explanation from IG. The last tranche of the previous dividend finally got into my account a full month after payment date.

[hpcg] 01/12/2020 12:50

alpal2 - presume you have got your IG dividend as mine turned up on time.

[makinbuks] 30/11/2020 15:25

Yes received 26/11 in HL

[skyship] 30/11/2020 14:16

Divi - yes, rec'd with YouInvest (AJ Bell)

[makinbuks] 30/11/2020 11:46

Returning to an earlier point, the value of Ripple hasn't changed much. Is that because they are in prefs?

[alpal2] 30/11/2020 09:19

1]Monthly NAV down 0.8% but it's all in Private Equity write-down.
2] Anybody received their TFG dividend? I'm with IG and it always takes them about 3 weeks to pay out due to 'discrepancy with their custodian'.

[tula100] 23/11/2020 16:24

The answer to the question below is that when we are paid a dividend, we still have a shareholding to receive future dividends! A tender is not a 'return' to shareholders, it is simply a share sale, and if you sell at a lower price than you paid you have a negative return.
" Why on earth would the tenders not constitute returns to shareholders in exactly the way a dividend does? You can say its just paying us money we already own but so is a dividend."

[hugepants] 23/11/2020 08:28

I think there should be some correlation

Nov 22, 2020,06:11pm EST

[bsdjj] 21/11/2020 23:54

Is the big rise in the value of Ripple (up 40% today) material to Tetragon? I see the investment in RippleLabs was just over 7% of NAV at the last set of results.....

[makinbuks] 19/11/2020 16:17

I think ceaserxzy makes a great point. The NAV here is close to 100% conceptual and along with all the governance and fee issues that is why this will always trade at a large discount. Quite simply to market places a healthy dose of scepticism on the managers self valuation of NAV.

Sky, I agree with you, the tender does not attract new investors and it is not a good deal (the point above notwithstanding) for the seller. But for the holder it is better to see the company buying back at a low tender price than one near NAV. Also the value delivered to the holder is greater than the simple dividend if tat is the distribution method chosen. You're point about it benefiting the managers who's fees are based on NAV is correct as well. NAV improves, ergo holding shareholders and the manager both benefit

[horndean eagle] 19/11/2020 09:42

My guess is they struggle to complete the fill at $9.50. Sellers will have dumped since last tender so less stock around. Market also a very different place to back then. No rush to liquidate.

[alpal2] 19/11/2020 09:16

HE: I did exaggerate but not by much. Tender price in June 2020 was $8-75 and total amount tendered at that price was $43m. Hence the prorated allocation of 58%. That left $18m of stale bulls at that price. As this is not a liquid share, not many of those will have been able to exit. But let's see the numbers when this tender closes.

[ceaserxzy] 18/11/2020 21:11

The problem is not tender itself although it magnifies its visibility.

The trust claims consistent NAV performance of over 10% return over many years, which means that on over $24 NAV, the profit per share will be over $2.4. So 1) the earnings covered pre-covid19 dividend by over 3 timesand 2) It has built up a very large profit reserve. How can the management justify cutting the already measly (compared to claimed earnings and NAV) dividend almost by half.

SO the NAV, which the tender helps to enhance, is only there to serve themselves as their performance fee is linked to NAV performance and not to benefit the shareholders,it makes one wonder how truthful the NAV is.

[horndean eagle] 18/11/2020 19:35

You have your maths wrong. It was less than $50m that was tendered at that price. You guys obviously haven't been in TFG that long. Moons ago they kept on tendering at $10. In very large size. Eventually it cracked and no sellers. The next tender they did was at $11.60 and the one after at $13.60. In theory if they carried on tendering then the price would go up because you are clearing out more of the overhang each time. Obviously since $13.60 another wedge of stale bulls came out. Eventually they clear out and then price should move higher.

[alpal2] 18/11/2020 18:05

The previous tender ended at $8-50. But more important, the value of shares tendered at that price was over $50m vs the $25m available.
Since that had no effect of narrowing the discount to NAV, I cannot imagine why they're doing it again.
Sky: Agree only regular buyback of 15% will have effect; particulary of stated that they will continue until discount is less than [say] 20%.

[skyship] 18/11/2020 16:26

Do I miss something?

Yes, you do. A tender conducted at the share price provides no incentive to new shareholders, ergo no rise in the share price to reduce the discount. Conduct it at or near to NAV, which is the normal way tenders are conducted, then shareholders reap a return of their accumulated shareholder funds.

[makinbuks] 18/11/2020 16:13

Spec, the discount only ever widens, yes my point is simply we could have had that discussion 12 months ago, indeed we probably did, but in March there was a spike like widening to 60% which is unjustified if the COVID crisis is brought to an end. We should see a return to the 40% discount area. That makes the shares priced attractively relatively speaking at this moment

Sky, what kind of investor am I? One that likes a return but doesn't mind how it comes (I don't yet live off the income from my savings). So I agree with your first # if we're talking about a trading company. However, this is an investment company and if they have £1 of profit, should they distribute it to shareholders or do we trust them enough to reinvest it in more investments and compound the return for future years or do they use it to buy back shares at a discount to the NAV. As I said I appreciate all three but clearly the latter two amplify POTENTIALLY my return so are preferable.

I don't follow you regarding a proper DCM up to 15% buyback. The tender offer is surely a mechanism to perform that buyback. Do I miss something?

[skyship] 17/11/2020 14:07

Makinbuks - I think you will find that everyone without exception knows full well that the tenders are a total waste of time for shareholders. You say "I accept the dividend as a marketing tool is attractive to a certain group of investors". In what group would you categorise yourself?

# A dividend paid out of earnings rewards shareholders with a justifiable return for lending our capital to support the company

# A tender is an alternative way to reward shareholders when conducted at a premium to the sp, but also at a minor discount to the underlying NAV

# A tender conducted at the sp, or even at a discount - as all the TFG tenders are - merely provides a shareholder exit for some, but nothing for all for other shareholders.

NB: There is zilch benefit to shareholders in remorselessly increasing the NAV discount from 63% to 64% to 65%. The discount has no bearing on the share price when at this level. The only thing that will is to pay a proper dividend and to instigate a proper DCM though a 15% buyback Scheme.

[riskvsreward] 17/11/2020 12:59

Agree NAV is not relevant to shareholders if it doesn't bring them any meaningful return over a reasonable time scale. One can make an extreme example of an analogy of putting a number on your house of NAV of say a million pounds but if no one else pays that figure to you and you don't get any meaningful rent from it, then that NAV figure means nothing.

And worse still, if the government takes a property tax based on that number (i.e management fee), it will make it even less attractive.

[spectoacc] 17/11/2020 12:25

They arguably have control already thanks to the shares being non-voting.

@Makinbuks - " Why on earth would the tenders not constitute returns to shareholders in exactly the way a dividend does? You can say its just paying us money we already own but so is a dividend."

The problem is that the tenders enhance the NAV - but the NAV is seemingly irrelevant to us. The discount only seems to widen.