Tetragon Financial Group Limited

Good afternoon. Thank you for joining Tetragon's 2020 Annual Report InvestiCool. 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 press call release. This press release can be found on the homepage of the company website, www.tetragoninv.com. In addition, questions can be submitted online whilst watching the presentation. As a reminder, this conference call is being recorded. I will now turn you over to Paddy Deer to commence the presentation.

Good morning, good afternoon. As one of the principals and founders of the investment manager of Tetragon Financial Group Limited, I'd like to welcome you to the investor call, where we'll focus on the company's 2020 annual results. Paul Gannon, 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 some time discussing the outlook. And as usual, we'll 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. Before I go into the presentation, just some reminders. First, Tetragon shares subject to restrictions on ownership by US persons and are not intended for European retail investors. And these are described in some detail on our website. Tetragon anticipates that its typical investors will be institutional and professional investors who wish to invest for the long term in a capital appreciation and income producing investment. These investors should have experience in investing in financial markets and collective investment undertakings and can be capable themselves of evaluating the merits and risks of Tetragon shares. And they should have sufficient resources both to invest in potentially illiquid securities and to be able to bear any losses which may equal the whole amount invested that may result from the investment. I'd also like to remind everyone that the following may contain forward-looking comments, which include statements regarding the intentions, beliefs, or current expectations concerning performance and financial condition of 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. So as a reminder, Tetragon continues to focus on three main metrics – We look at how value is being created via NAV per share total return. We also look at investment returns measured as a return on equity or ROE. And finally, we monitor how value is being returned to shareholders through distributions. The fully diluted NAV per share was $26.57 at 31st December 2020. After adjusting for dividends reinvested at the NAV, the NAV per share total return for the year was 9.5%, which compares to 13.6% in 2019. For monitoring investment returns, as in previous years, we used an ROE calculation, which in 2020 was up 7.6% net of all fees and expenses. With reference to that target, the average ROE achieved since IPO is now 12.1%, which is within our target range of 10% to 15% per annum. Later on in the call, we'll give more colour as to how the specific asset classes contributed to the return this year. Finally, moving on to the last metric, distributions. As a reminder, during the first half of the year, Tetragon modified its dividend and capital return policy to remove any specific dividend target payout ratio referenced to normalized earnings. Tetragon declared a dividend of $0.10 for the fourth quarter, which represents a dividend of $0.40 for the year. Based on the year-end share price of $9.50, the last four quarters dividend represents a yield of approximately 4.2%. In addition, during Q4, the manager took advantage of the fund's widened discount to NAV to repurchase a further $25 million of shares, which, in addition to the $25 million purchased in H1, was accretive to NAV per share by $0.92. Finally, now on to the NAVBRIDGE. This breaks down into its component parts, the growth of Tetragon's fully diluted NAV per share from $24.76 at the end of 2019 to $26.57 per share at the end of December 2020. So going through the key elements, investment income increased NAV per share by $3.20. Operating expenses, management and incentive fees reduced NAV per share by $1.22 with a further $0.07 per share reduction due to interest expense. On the capital side, gross dividends reduced now per share by 49 cents. There was a net dilution of 53 cents per share, which is labeled as other share dilution. This bucket primarily reflects the impact of dilution from stock dividends, plus the additional recognition of equity-based compensation shares. And finally, the impact of the $50 million share buyback across the year resulted in an accretion to NAV per share of 92 cents. With that, I will now hand over to Paddy.