Tetragon Financial Group Limited

Good afternoon. Thank you for joining Tetragon's investor call. You are all in listen-only mode. The call will be accompanied by a live presentation which can be viewed online by registering at the link provided in the company's conference call press release. This press release can be found on the homepage of the company's website www.tetragoninv.com. In addition, questions can be submitted online while watching the presentation. And as a reminder, this call is being recorded. I will now turn you over to Paddy Deer to commence the presentation.

As one of the principals and founders of the investment manager of Tetragon Financial Group Limited, I'd like to welcome you to our investor call, which will focus on the company's first half results for 2020. Paul Gann and our CFO will review the company's financial performance for the period. Steve Prince and I will talk you through some of the detail of the portfolio and performance. And Steve will spend time discussing the outlook. As usual, we will conclude with questions. Those taken electronically via our web-based system at the end of the presentation, as well as those received since the last update. The PDF of the slides are now available to download on our website, and if you're on the webcast, directly from the webcast portal. I would like to remind everyone that the following may contain forward-looking comments, including statements regarding the attentions, beliefs, or current expectations concerning performance and financial condition on the products and markets in which Tetragon invests. Our performance may change materially as a result of various possible events or factors. So with that, I'd like to pass over to Paul.

Thanks, Paddy. As a reminder, Tetragon continues to focus on three main metrics. We look at how value is being created via NAV for Shared Total Returns, We also look at investment returns measured as a return on equity or ROE. And we monitor how value is being returned to shareholders through distributions, which are mainly in the form of dividends. The fully diluted NAFTA share was $24 at 30th of June 2020. After adjusting to dividends reinvested at the NAV, the NAV per share total return year-to-date is down 1.9%, which compares to up 8.1% for the same period in 2019. For monitoring investment returns, we continue to use an ROE calculation, and for H1 2020, this was down 2.9%, which is net of all fees and expenses. The graph that you can see right now also shows what the return would be if it were annualized for the full year, which is down 5.8%. With reference to that target, the average ROE achieved since IPO is 11.8%, which is within our target range of 10% to 15%. Later on in the call, we'll give more colors to how the specific asset classes contributed to the return this year. Finally, moving on to the last key metric, which is dividends, as a reminder, during the first half of the year, Tectrecon modified its dividend and capital return policy to remove any specific dividend target payout ratio referenced in normalised earnings. Tectrecon declared a dividend for the second quarter, which represents a year-to-date dividend of 20 cents. Based on the quarter end share price of $8.76, The last four quarters dividend in aggregate represents a yield of approximately 6.5%. In addition, during the second quarter, the manager took advantage of the fund's widened discount to NAV to repurchase $25 billion of shares, which was accretive to NAV by 1.8%. So now on to what we call the NAV bridge. This breaks down into its component parts, the growth of Texcon's fully diluted NAV per share from $24.76 at the end of 2019 to $24 per share at the end of the first half. So looking in detail at some of the component parts, investment income reduced NAV per share by $0.47 per share. Operating expenses and manager fees reduced NAV per share by by a further 21 cents, with 4 cents per share reduction due to interest expense. On the capital side, gross dividends reduced an average share by 29 cents. There was a net dilution of 20 cents per share, which is labelled as other share dilution. This bucket primarily reflects the impact of dilution from stock dividends plus the additional recognition of equity-based compensation shares. Finally, the impact of the $25 million share buyback I mentioned previously, which closed in June 2020, resulted in 45 cents of NAV accretion. I will now hand over to Paddy.