Shareholders

Get the latest financial results, monthly factsheets and information for shareholders.

Key performance metrics

Tetragon focuses on the following key metrics when assessing how value is being created for, and delivered to, Tetragon shareholders:

NAV per share

Investment returns / return on equity

Dividends

Returns and Performance Highlights

NAV Per Share Total Return(15)

1.0%

One Year to 31 December 2022

9.6%

Five Years Annualised

10.5%

10 Years Annualised

10.8%

Since IPO Annualised

398%

Since IPO

Investment Returns/Return on Equity (RoE)(10)

(0.8)%

2022 YTD RoE

10-15%

RoE Target

11.6%

Annual Average Since IPO

Dividends

$0.11

Q3 2022 Dividend

$0.33

2022 YTD Dividends

4.6%

Dividend Yield(16)

(8.7)%

Dividend 5-Year CAGR(17)

NAV Per Share Total Return and Share
Price since inception

            Dividends and Share Repurchases
            Dividend and Capital Return Policy

            Tetragon seeks to return value to its shareholders, including through dividends and share repurchases.

            Tetragon’s Board of Directors has the authority to declare dividend payments, based upon the recommendation of Tetragon’s investment manager, subject to the approval of Tetragon’s voting shareholder and adherence to applicable law, including the satisfaction of a solvency test as required pursuant to the Companies (Guernsey) Law, 2008, as amended. In addition to making dividend recommendations to the Board of Directors, Tetragon’s investment manager may authorise share repurchases.

            Decisions with respect to declaration of dividends and share repurchases may be informed by a variety of considerations, including (i) the expected sustainability of the company’s cash generation capacity in the short and medium term, (ii) the current and anticipated performance of the company, (iii) the current and anticipated operating and economic environment, (iv) other potential uses of cash ranging from preservation of the company’s investments and financial position to other investment opportunities and (v) Tetragon’s share price.

            Tetragon may also pay scrip dividends, which payments are currently conducted through an optional stock dividend plan.

            Dividend Information

            On 26 October 2022, the Board of Directors of Tetragon declared a dividend of U.S.$0.11 (11.00 cents) per share in respect of the third quarter of 2022. The ex-dividend date is 1 November 2022. The record date is 2 November 2022. Payment of the dividend will take place from 25 November 2022.

            Shareholders may elect to receive dividends in the form of Tetragon shares by making a dividend share election up to 14 November 2022. If no election is made, the dividend will be paid in cash from 25 November 2022.

            Cash dividends may be received in sterling by those shareholders making a dividend currency election up to 14 November 2022. If no election is made, the dividend will be paid in U.S. dollars from 25 November 2022.

            The reference price for shares delivered in lieu of cash is U.S. $9.40, resulting in a conversion ratio of one newly issued share for every 85.45 dividend rights held. The reference price is based on the volume‑weighted average of the trading prices of a non-voting share on Euronext Amsterdam N.V. for the five-day trading period (treated as a single period) from 1 November to 7 November 2022.

            Tax consequences of receiving the interim dividend may vary upon the tax residence of the shareholder.

            Dividend Period Declared Date Ex-Date Record Date Payment Date Dividend (USD) Conversion Ratio
            Q3 202226 Oct 20221 Nov 20222 Nov 202225 Nov 2022 $0.1100 85.4545
            Q2 2022 27 Jul 2022 1 Aug 2022 2 Aug 2022 25 Aug 2022 $0.1100 93.0909
            Q1 2022 27 Apr 2022 2 May 2022 3 May 2022 26 May 2022 $0.1100 93.3636
            Q4 2021 4 Mar 2022 8 Mar 2022 9 Mar 2022 1 Apr 2022 $0.1100 78.9100
            Q3 2021 27 Oct 2021 1 Nov 2021 2 Nov 2021 25 Nov 2021 $0.1000 88.2000
            Q2 2021 28 Jul 2021 2 Aug 2021 3 Aug 2021 26 Aug 2021 $0.1000 96.8000
            Q1 2021 29 Apr 2021 3 May 2021 4 May 2021 27 May 2021 $0.1000 100.1000
            Q4 2020 24 Feb 2021 1 Mar 2021 2 Mar 2021 25 Mar 2021 $0.1000 100.3000
            Q3 2020 27 Oct 2020 2 Nov 2020 3 Nov 2020 26 Nov 2020 $0.1000 90.3000
            Q2 2020 29 Jul 2020 3 Aug 2020 4 Aug 2020 27 Aug 2020 $0.1000 90.5000
            Q1 2020 28 Apr 2020 4 May 2020 5 May 2020 27 May 2020 $0.1000 86.8000
            Q4 2019 25 Feb 2020 2 Mar 2020 3 Mar 2020 25 Mar 2020 $0.1875 60.8000
            Q3 2019 30 Oct 2019 1 Nov 2019 4 Nov 2019 26 Nov 2019 $0.1850 66.9189
            Q2 2019 30 Jul 2019 1 Aug 2019 2 Aug 2019 27 Aug 2019 $0.1850 66.7027
            Q1 2019 29 Apr 2019 2 May 2019 3 May 2019 27 May 2019 $0.1825 69.9178
            Q4 2018 26 Feb 2019 28 Feb 2019 1 Mar 2019 25 Mar 2019 $0.1825 69.2055
            Q3 2018 29 Oct 2018 31 Oct 2018 1 Nov 2018 23 Nov 2018 $0.1800 67.5555
            Q2 2018 30 Jul 2018 1 Aug 2018 2 Aug 2018 24 Aug 2018 $0.1800 71.3333
            Q1 2018 26 Apr 2018 30 Apr 2018 2 May 2018 24 May 2018 $0.1775 70.9859
            • Tetragon Financial Group Limited Currency Election Form

            Optional Stock Dividend

            Tetragon has an Optional Stock Dividend Plan in respect of dividend payments, which gives shareholders the option to elect to receive any declared dividends in the form of additional Tetragon shares. Please refer to the brochure for more information.

            • Tetragon Financial Group Limited Optional Stock Dividend Plan Brochure

            Share repurchases

            Tetragon seeks to return value to its shareholders, including through dividends and share repurchases.  Decisions with respect to declaration of dividends and share repurchases may be informed by a variety of considerations, including (i) the expected sustainability of the company’s cash generation capacity in the short and medium term, (ii) the current and anticipated performance of the company, (iii) the current and anticipated operating and economic environment, (iv) other potential uses of cash ranging from preservation of the company’s investments and financial position to other investment opportunities and (v) Tetragon’s share price. Cumulative dividends paid includes the cash and stock dividends paid to shareholders, but excludes dividends declared on shares held in escrow.

            Since IPO to 31 December 2022, Tetragon has spent $776.3 million on share repurchases.

            View all Share repurchases

            Share repurchase and dividend history

            ($ millions)

            Year Amount Repurchased Cumulative Amount Repurchased Dividends Cumulative dividends
            2007$2.2$2.2$56.5$56.5
            2008$12.4$14.5$60.4$117.0
            2009$6.6$21.2$18.8$135.7
            2010$25.5$46.7$37.5$173.3
            2011$35.2$81.9$46.4$219.6
            2012$175.6$257.5$51.5$271.1
            2013$16.1$273.6$55.5$326.6
            2014$50.9$324.5$58.7$385.3
            2015$60.9$385.4$63.3$448.6
            2016$157.8$543.2$61.0$509.6
            2017$65.4$608.6$64.0$573.6
            2018-$608.6$65.1$638.7
            2019$50.3$658.8$66.5$705.2
            2020$50.3$709.1$36.4$741.5
            2021-$709.1$36.8$778.3
            2022$67.2$776.3$19.2$797.5
            TOTAL$776.3$797.5
            Risk Factors
            Principal Risks

            The principal risks facing Tetragon as a listed investment company are both financial and operational in nature, and ultimately relate to both Tetragon’s issued and outstanding non-voting shares as well as its investment portfolio. The financial risks inherent in its portfolio are primarily market-related or are otherwise relevant to particular asset classes. Operational risks include those related to Tetragon’s organisational structure, investment manager, legal and regulatory environment, taxation, financing and other areas where internal or external factors could result in financial or reputational loss.

            The risks and uncertainties discussed below are those that Tetragon believes are material, but these risks and uncertainties are not the only ones that the company faces. Additional risks and uncertainties that the company does not presently know about or that it currently believes are immaterial may also adversely impact the company’s business, financial condition, results of operations, the value of its assets or the value of an investment in Tetragon’s shares. If any of the following risks actually occur, the company’s business, financial condition, results of operations, the value of its assets and the value of your investment would likely suffer.

            Financial Risks

            Risks Relating to Investing in Tetragon’s Shares

            The market price of Tetragon’s non-voting shares fluctuates significantly and may bear no correlation to Tetragon’s NAV, and holders may not be able to resell their Tetragon shares at or above the price at which these were purchased. In addition to portfolio-level and operational risks highlighted below, factors that may cause the price of Tetragon’s shares to vary include:

            • Changes in Tetragon’s financial performance and prospects or in the financial performance and prospects of companies engaged in businesses that are similar to Tetragon’s business. 
            • Changes in the underlying values of Tetragon’s investments. 
            • Illiquidity in the market for Tetragon shares, including due to the liquidity of the Euronext Amsterdam N.V. exchange and the Specialist Fund Segment of the Main Market of the London Stock Exchange.
            • Speculation in the press or investment community regarding Tetragon’s business or investments, or factors or events that may directly or indirectly affect its business or investments. 
            • A loss of a major funding source. If Tetragon breaches the covenants under its financing agreements it could be forced to sell assets at prices less than fair value. 
            • A further issuance of shares or repurchase of shares by Tetragon. 
            • Dividends declared by Tetragon. 
            • Broad market fluctuations in securities markets that in general have experienced extreme volatility often unrelated to the operating performance or underlying asset value of particular companies or partnerships. 
            • General economic trends and other external factors. 
            • Sales of Tetragon shares by other shareholders. 
            • The ability to invest in Tetragon shares or to transfer any shares may be limited by restrictions imposed by ERISA regulations and Tetragon’s articles of incorporation. 

            Risks Relating to Tetragon’s Investment Portfolio

            Tetragon’s investment portfolio comprises a broad range of assets, including public and private equities and credit (including distressed securities and structured credit), convertible bonds, real estate, venture capital, infrastructure, bank loans and TFG Asset Management, a diversified alternative asset management business. As a general matter, the portfolio is exposed to the risk that the fair value of these investments will fluctuate.   

            Risks Relating to TFG Asset Management

            • The asset management business is intensely competitive. 
            • The performance of TFG Asset Management may be negatively influenced by various factors, including the performance of managed funds and vehicles and its ability to raise capital from third-party clients. 
            • TFG Asset Management is highly dependent on its investment professionals for the management of its investment funds and vehicles and on other employees for management, oversight and supervision of its asset management businesses. If and when such persons cease to participate in the management of TFG Asset Management or its investment funds and vehicles, the consequence could be material and adverse. 
            • Certain of TFG Asset Management’s businesses have a limited or no operating history. 
            • The asset management business is subject to extensive regulation.  
            • Misconduct of TFG Asset Management employees or at the companies in which TFG Asset Management has invested could harm TFG Asset Management by impairing its ability to attract and retain clients and subjecting it to significant legal liability and reputational harm.  
            • Failure by TFG Asset Management to deal appropriately with conflicts of interest in its investment business could damage its reputation and adversely affect its businesses.  
            • Tetragon’s investment in TFG Asset Management is illiquid. 

             

            Risks Relating to Other Tetragon Portfolio Investments

            Tetragon otherwise currently invests or expects to invest its capital, directly and indirectly, in: 

            • bank loans, generally through subordinated, residual tranches of CLOs; 
            • real estate, generally through private equity-style funds managed by BentallGreenOak; 
            • public and private equity securities, particularly in event-driven strategies, generally through the Polygon European Equity Opportunity Fund; 
            • convertible securities, mainly in the form of debt securities that can be exchanged for equity interests, including through the Acasta Global Fund; 
            • credit securities (including distressed securities and structured credit), including through Tetragon Credit Partners; 
            • private equity and venture capital through direct investments and fund investments, including through Banyan Square Partners; 
            • infrastructure projects through Equitix Holdings Limited; 
            • legal assets; and 
            • mining-industry related equity securities and instruments, including through Hawke’s Point. 

            These portfolio investments are subject to various risks, many of which are beyond Tetragon’s control, including: 

            • These securities are susceptible to losses of up to 100% of the initial investments. 
            • The performance of these investments may significantly depend upon the performance of the asset manager of funds or products in which Tetragon invests. 
            • Tetragon may be exposed to counterparty risk. 
            • The fair value of investments, including illiquid investments, may prove to be inaccurate and require adjustment. 
            • Adverse changes in international, national or local economic and other conditions could negatively affect investments. 
            • Tetragon is subject to concentration and geographic risk in its investment portfolio. 
            • Tetragon’s investments are subject to interest rate risk, which could cause its cash flow, the fair value of its investments and its operating results to decrease. 
            • Tetragon’s investments are subject to currency risks, which could cause the value of its investments in U.S. dollars to decrease regardless of the inherent value of the underlying investments. 
            • The utilisation of hedging and risk management transactions may not be successful, which could subject Tetragon’s investment portfolio to increased risk or lower returns on its investments and in turn cause a decrease in the fair value of its assets. 
            • Tetragon engages in over-the-counter trading, which has inherent risks of illiquid markets, wide bid/ask spreads and market disruption. 
            • Leverage and financing risk and the use of options, futures, short sales, swaps, forwards and other derivative instruments potentially magnify losses in equity investments. 
            • Market illiquidity could negatively affect these investments. 
            • These investments may be subject to medium and long-term commitments with restrictions on redemptions or returns of capital. 
            Operational Risks

            Risks Relating to Organisational Structure

            Tetragon has approved a very broad investment objective and the investment manager has substantial discretion when making investment decisions. In addition, the investment manager’s strategies may not achieve Tetragon’s investment objective.

            Tetragon’s listed shares do not carry any voting rights other than limited voting rights in respect of variation of their class rights. Tetragon’s voting shares are owned by Polygon Credit Holdings II Limited which is a non-U.S. affiliate of Tetragon’s investment manager and is ultimately owned by Reade Griffith and Paddy Dear, who also majority own the investment manager. Pursuant to an agreement between Reade Griffith and Paddy Dear, Reade Griffith is the controller of Tetragon’s voting shares and the investment manager. Tetragon’s voting shares control the composition of the Board of Directors and exercise extensive influence over Tetragon’s business and affairs.

            Under Tetragon’s articles of incorporation, a majority of its directors are required to be independent (Independent Directors), satisfying in all material respects the UK Corporate Governance Code definition of that term. However, because the Board of Directors may generally take action only with the approval of five of its directors, the Board of Directors generally are not able to act without the approval of both directors who are affiliated with the holder of Tetragon’s voting shares. The holder of the voting shares has the right to amend Tetragon’s articles of incorporation to change these provisions regarding Independent Directors and to remove a Director from office for any reason. As a result of these provisions, the Independent Directors are limited in their ability to exercise influence over Tetragon’s business and affairs.

            Tetragon’s organisational, ownership and investment structure creates significant conflicts of interest that may be resolved in a manner which is not always in the best interests of Tetragon or its shareholders.

            Tetragon’s directors and its administrator may have conflicts of interest in the course of their duties.

            Tetragon’s ability to pay its expenses and dividends will depend on its earnings, financial condition, fair value of its assets and such other factors that may be relevant from time to time, including limitations under the Companies (Guernsey) Law, 2008, as amended.

            Risks Relating to Tetragon’s Investment Manager

            Tetragon’s success depends on its continued relationship with its investment manager and its principals. If this relationship were to end or the principals or other key professionals were to depart, it could have a material adverse effect on Tetragon’s business, investments and results of operations.

            Tetragon is reliant on the skill and judgment of its investment manager in valuing and determining an appropriate purchase price for its investments. Any determinations of value that differ materially from the values Tetragon realises at the maturity of the investments or upon their disposal will likely have a negative impact on Tetragon and its share price.

            Tetragon’s arrangements with its investment manager were negotiated in the context of an affiliated relationship and may contain terms that are less favourable than those which otherwise might have been obtained from unrelated parties in an arm’s-length negotiation.

            The holders of Tetragon’s listed shares will not be able to terminate its Investment Management Agreement with the investment manager, and the Investment Management Agreement may only be terminated by Tetragon in limited circumstances.

            The liability of Tetragon’s investment manager is limited under Tetragon’s arrangements with it, and Tetragon has agreed to indemnify the investment manager against claims that it may face in connection with such arrangements, which may lead the investment manager to assume greater risks when making investment-related decisions than it otherwise would if investments were being made solely for its own account.

            The investment manager does not owe fiduciary duties to Tetragon shareholders. However, these contractual limitations do not constitute a waiver of any obligations that the investment manager has under applicable law, including the U.S. Investment Advisers Act of 1940 and related rules.

            The investment manager may devote time and commitment to other activities.

            The fees payable to the investment manager are based on changes in Tetragon’s NAV, which will not necessarily correlate to changes in the market value of its listed shares.

            Tetragon’s compensation structure with its investment manager may encourage the investment manager to invest in high-risk investments. The management fee payable to the investment manager also creates an incentive for it to make investments and take other actions that increase or maintain Tetragon’s NAV over the near term even though other investments or actions may be more favourable.

            The compensation of the investment manager’s personnel contains significant performance-related elements, and poor performance by Tetragon or any other entity for which the investment manager provides services may make it difficult for Tetragon’s investment manager to retain staff.

            Tetragon’s investment manager relies on two entities that are part of TFG Asset Management for a broad range of services to support its activities. The services include (i) infrastructure services such as operations, financial control, trading, marketing and investor relations, legal, compliance, office administration, payroll and employee benefits and (ii) services relating to the dealing in and management of investments, arrangement of deals and advising on investments. TFG Asset Management has implemented a cost-allocation methodology with the objective of allocating service-related costs, including to Tetragon’s investment manager, in a consistent, fair, transparent and commercially based manner. TFG Asset Management then charges fees to Tetragon’s investment manager for the services allocated to it on a cost-recovery basis that is designed to achieve full recovery of the allocated costs. Tetragon’s Independent Directors, who are specifically mandated to approve, among other things, related-party transactions, are required to approve the methodology for allocating costs and in their sole discretion the application of that methodology as part of their oversight processes. As such, the annual cost allocation methodology update and the actual annual cost allocations that result based on these cost methodology policies and procedures are separately approved by the Independent Directors.

            There are conflicts of interest created by contemporaneous trading by Tetragon’s investment manager and investment managers that are part of TFG Asset Management.

            Risks Relating to Tetragon’s Legal Environment and Regulation

            Changes in laws or regulations or accounting standards, or a failure to comply with any laws and regulations or accounting standards, may adversely affect Tetragon’s business, investments and results of operations.

            Tetragon has and may become involved in litigation that may adversely affect Tetragon’s business, investments and results of operations.

            No formal corporate governance code applies to Tetragon under Dutch law and Tetragon reports against the AIC Corporate Governance Guide for Investment Companies (which incorporates the UK Corporate Governance Code) on a voluntary basis only.

            The rights of the non-voting shareholders and the fiduciary duties owed by the Board of Directors to Tetragon will be governed by Guernsey law and its articles of incorporation and may differ from the rights and duties owed to companies under the laws of other countries.

            Tetragon’s shares are subject to restrictions on transfers to certain shareholders located in the United States or who are U.S. persons, which may impact the price and liquidity of the shares.

            Tetragon’s shares are not intended for European retail investors. Tetragon anticipates that its typical investors will be institutional and professional investors who wish to invest for the long term in a predominantly income-producing investment and who have experience in investing in financial markets and collective investment undertakings and are capable themselves of evaluating the merits and risks of Tetragon shares and who 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.

            Tetragon is not, and does not intend to become, regulated as an investment company under the U.S. Investment Company Act of 1940 and related rules.

            Risks Relating to Taxation

            United States investors may suffer adverse tax consequences because Tetragon is treated as a passive foreign investment company (PFIC) for U.S. federal income tax purposes.

            Changes to tax treatment of derivative instruments may adversely affect Tetragon and certain tax positions it may take may be successfully challenged.

            Investors may suffer adverse tax consequences if Tetragon is treated as resident in the United Kingdom or the United States for tax purposes.

            Coronavirus and Public Health Emergency Risks

            In 2020, there was an outbreak of a novel and highly contagious form of coronavirus, or COVID-19, which the World Health Organization declared to constitute a “Public Health Emergency of International Concern”. The outbreak of COVID-19 resulted in numerous deaths, adversely impacted global commercial activity and contributed to significant volatility in many equity and debt markets globally. Many governments and businesses reacted by instituting quarantines and other social distancing measures, prohibitions on travel (including on the movement of people and goods between countries), material monetary and/or fiscal policy changes, and the closure of offices, businesses, schools, retail stores and other public venues. Such measures, as well as the general uncertainty surrounding the dangers and impact of COVID-19, have created significant disruption in supply chains and economic activity and have had a particularly adverse impact on transportation, hospitality, tourism, entertainment and other industries.

            Any public health emergency, including any outbreak of COVID-19, SARS, H1N1/09 flu, avian flu, other coronavirus, Ebola or other existing or new epidemic diseases, or the threat thereof, could have a significant adverse impact on Tetragon and could adversely affect its ability to fulfil its investment objectives. The spread of COVID-19 creates a variety of potential risks. The magnitude and duration of these risks cannot be predicted at this time.

            The extent of the impact of any public health emergency on Tetragon’s investments’ operational and financial performance will depend on many factors, including the duration and scope of such public health emergency, the extent of any related travel advisories and restrictions implemented, the impact of such public health emergency on overall supply and demand (consumer and industrial), goods and services, investor liquidity, consumer confidence and levels of economic activity and the extent of its disruption to important global, regional and local supply chains and economic markets, disruptions to shipping and other transportation, all of which are highly uncertain and cannot be predicted. The effects of a public health emergency may materially and adversely impact the value and performance of Tetragon’s investments, Tetragon’s ability to source, manage and divest investments and its ability to achieve its investment objectives, all of which could result in significant losses to Tetragon. In addition, the operations of Tetragon’s investments may be significantly impacted, or even temporarily or permanently halted, as a result of government quarantine measures, voluntary and precautionary restrictions on travel or meetings and other factors related to a public health emergency, including operational disruptions and its potential adverse impact on the health of any such entity’s personnel and reduced efficiency due to illness of a portion of the workforce or the need to work remotely. Tetragon’s key vendors and service providers, such as providers of outsourced accounting services, consultants and external counsel, are also subject to these risks.

            Risks Resulting from the United Kingdom’s Exit from the European Union

            The United Kingdom withdrew from the European Union on 31 January 2020. This is referred to as Brexit. In connection with Brexit, the United Kingdom and the European Union agreed the Trade and Cooperation Agreement, or TCA, that governs the future trading relationship between the United Kingdom and the European Union in specified areas. The TCA took effect from 1 January 2021 following a transition period that commenced immediately following the Brexit date.

            The United Kingdom is no longer in the European Union customs union and is outside of the European Union single market. As a result, logistical disruption is expected whilst the United Kingdom and European Union implement the new relationship under the TCA. Notably, the TCA does not include a EU-wide cooperation arrangement for financial services, with U.K. firms instead having to negotiate individual European Union member state regulations and cooperation/recognition arrangements. The initial timeframe set to agree a financial services cooperation framework may be subject to extension and a cooperation agreement on financial services is not guaranteed. The uncertainty surrounding the implementation of the TCA and the outcome of ongoing negotiations may have economic, tax, fiscal, legal, regulatory and other implications for the asset management industry, the broader European and global financial markets generally and for Tetragon. This uncertainty is likely to continue to impact the global economic climate and may impact opportunities, pricing, availability and cost of bank financing, regulation, values or exit opportunities of companies or assets based, doing business, or having service or other significant relationships in, the United Kingdom or the European Union, including companies or assets held or considered for prospective investment by Tetragon.

            The future application of EU-based legislation and/or taxation to the private fund industry in the United Kingdom will depend, among other things, on how the United Kingdom negotiates its relationship with the European Union as regards financial services. There can be no assurance that any negotiated laws, taxation and/or regulations will not have an adverse impact on Tetragon and its investments. The ongoing effects of Brexit may result in significant market dislocation, heightened counterparty risk, an adverse effect on the management of market risk and, in particular, asset and liability management (due in part to redenomination of financial assets and liabilities), an adverse effect on Tetragon and increased legal, regulatory or compliance burden on Tetragon, each of which may have a negative impact on the operations, financial condition, returns or prospects of Tetragon.

            Whilst the most immediate impacts of Brexit on corporate transactions will likely be related to changes in market conditions, the development of new regulatory regimes and parallel competition law enforcement may have an adverse impact on transactions, particularly those occurring in, or impacted by conditions in, the United Kingdom and the European Union.

            Valuation

            The administrator for Tetragon, TMF Group Fund Services (Guernsey) Limited, values the investments of Tetragon on an ongoing basis. The NAV per share is expected to fluctuate over time with the performance of Tetragon’s investments. The NAV of Tetragon and the NAV per share are determined as at the close of business on the last business day of each fiscal quarter (Valuation Day) for purposes of calculating incentive fees.

            Valuation principles

            The values of residual tranches of CLO products are determined by reference to a third-party valuation model that is used by both Tetragon’s investment manager and its administrator. The model contains characteristics of the CLO product’s structure, including current assets and liabilities and inception-to-date performance, based upon information derived by a specialist firm from the trustee reports. Key model inputs include asset spreads, expected defaults and expected recovery rates for the relevant category of underlying collateral held in the CLO product. These inputs are derived by reference to a variety of market sources, which are used by both Tetragon’s investment manager and the administrator. The model is used to project future projected cash flows which are discounted back to arrive at a fair value.

            Other non-equity investments (i.e., rated tranches) in CLO products are valued on the basis of the latest available valuation provided by an independent valuation agent.

            Any security which is listed or quoted on any securities exchange or similar electronic system and regularly traded thereon is valued at its last traded price on the relevant Valuation Day or, if no trades occurred on such day, at the closing bid price if held long by Tetragon and at the closing offer price if sold short by Tetragon, as at the relevant Valuation Day, and as adjusted in such manner as the Board of Directors, in its sole discretion, thinks fit, having regard to the fair value of the security, and where prices are available on more than one exchange or system for a particular security the price is the last traded price or closing bid or offer price, as the case may be, on the exchange which constitutes the main market for such security or the one which the Board of Directors in its sole discretion determines provides the fairest criteria in ascribing a value to such security.

            Any security which is not listed or quoted on any securities exchange or similar electronic system or if, being so listed or quoted, is not regularly traded thereon or in respect of which no prices as described above are available, is valued by the Board of Directors in good faith having regard to its cost price, the price at which any recent transaction in the security may have been effected, the size of the holding having regard to the total amount of such security in issue, and such other factors as the Board of Directors in its sole discretion deems relevant in considering a positive or negative adjustment to the valuation.

            Investments, other than securities, which are dealt in or traded through a clearing firm or an exchange or through a financial institution are valued by reference to the most recent official settlement price quoted by that clearing house, exchange or financial institution. If there is no such price, then the average will be taken between the lowest offer price and the highest bid price at the close of business on any market on which such investments are or can be dealt in or traded, provided that where such investments are dealt in or traded on more than one market, the Board of Directors may determine at its discretion which market shall prevail.

            Investments, other than securities, which are not dealt in or traded through a clearing firm or an exchange or through a financial institution are valued on the basis of the latest available valuation provided by the relevant counterparty.

            Deposits are valued at their cost plus accrued interest.

            Any value (whether an investment or cash) denominated other than in U.S. Dollars is converted into U.S. Dollars at the rate (whether official or otherwise) which the Board of Directors in its absolute discretion, deems applicable as at the close of business on the relevant Valuation Day, having regard, among other things, to any premium or discount that it considers may be relevant and to costs of exchange.

            The Board of Directors or the administrator, as the investment manager’s appointed designee, may, at its discretion, permit any other method of valuation to be used if it considers that such method of valuation better reflects value and is in accordance with good accounting practice. To the extent feasible, expenses, fees and liabilities are accrued in accordance with IFRS. Reserves (whether or not in accordance with IFRS) may be taken for estimated or accrued expenses, liabilities or contingencies. Where there is any conflict between IFRS and the valuation principles set out in Tetragon’s Memorandum and Articles of Incorporation and herein in relation to the calculation of NAV, the latter principles shall take precedence. However, IFRS will take precedence for the purposes of financial reporting. Fully Diluted NAV per Share will be made available to shareholders on a monthly basis through Tetragon’s website.

            The information contained in this webpage supersedes any other disclosure by Tetragon with respect to such information. Subject to the foregoing, additional information with respect to Tetragon’s valuation policies may be found in the company’s annual audited financial statements. 

            Environmental, Social and Governance (ESG) Policy

            TFM, as the investment manager of Tetragon, is responsible for Tetragon’s ESG policy.

            Purpose and Scope of the Policy
            This ESG policy aims to provide transparency around TFM’s ESG beliefs and outlines its commitment to integrate material environmental, social, and governance issues into its investment process. The policy is applicable to Tetragon and its investments.

            ESG Investment Criteria
            ESG refers to a broad range of issues that may be considered in the investment process. Below are some examples of ESG issues under each category:

            E – Environmental S – Social G – Governance
            • Greenhouse gas (GHG) emissions
            • Energy management
            • Water and wastewater management
            • Human rights
            • Data security
            • Workplace health and safety
            • Workforce diversity
            • Minority shareholder rights
            • Board independence
            • Board diversity
            • Legal, regulatory and judicial environment

            ESG-related risks and opportunities vary depending on multiple factors such as the industry, geography and individual firm characteristics. Potential risks from poor ESG performance include governance failures, inefficiencies, operational disruption, reputational damage, liabilities and low employee engagement. Potential opportunities include access to new and high-growth markets, better relationships with key external stakeholders and competitive advantage.

            ESG Beliefs
            TFM believes that ESG considerations could influence the risk-return profile of Tetragon’s investments. TFM employs an ESG integration strategy, which is defined as the inclusion of material ESG information into the investment process. It is TFM’s view that ESG integration is fully consistent with Tetragon’s overall investment strategy. Additionally, given the evidence (both from academic and practitioner studies) demonstrating the link between ESG performance and financial performance, TFM believes that Tetragon’s shareholders should understand how stronger ESG integration may help deliver sustainable value over the long-term.

            ESG Integration
            TFM integrates ESG information into its investment process to help identify drivers of risk and return. It is worth noting that ESG information is not the only consideration in TFM’s investment decision making but rather expands the total information available to it when evaluating an investment. As part of its investment evaluation, TFM assesses ESG information alongside a wide variety of economic metrics and financial data, making investment decisions on a case-by-case basis.

            Responsibility for Implementation
            TFM’s Investment Committee and Risk Committee are responsible for overseeing ESG integration. The ESG policy will be reviewed annually.

            Relevant Commitments and Policies
            TFM and Tetragon have adopted a number of policies and commitments that are complementary to the ESG integration approach, including the following:

            • the Code of Ethics Policy and Proxy Voting Policy as found in the Compliance Manual; and
            • a Statement on the UK Modern Slavery Act.

            Tetragon also reports against the Code of Corporate Governance of the Association of Investment Companies (AIC).

            Analyst Coverage

            Tetragon is followed by the analysts listed below. Please note that any opinions, estimates or forecasts regarding Tetragon’s performance made by any of these analysts are theirs alone and do not represent opinions, forecasts or predictions of Tetragon or its management. Tetragon does not, by its reference above, distribute or otherwise imply its endorsement of or concurrence with such information, conclusions or recommendations.

            Firm Analyst Email Phone Number
            J.P. Morgan Cazenove Christopher Brown christopher.brown@jpmorgan.com +44 20 7134 4722
            Jefferies International Limited Matthew Hose matt.hose@jefferies.com +44 20 7029 8557
            Stifel Nicolaus Europe Iain Scouller iain.scouller@stifel.com +44 20 7710 7647
            Stifel Nicolaus Europe Anthony Stern anthony.stern@stifel.com +44 20 7710 7727
            Corporate Brokers

            Tetragon has appointed J.P. Morgan Cazenove and Jefferies International Limited to act as its corporate brokers.

            For inquiries, please contact:

            J.P. Morgan Cazenove
            William Simmonds
            Tel: +44 20 7742 4000

            Jefferies International Limited
            Tel: +44 20 7029 8140

            The AIC Code of Corporate Governance

            In September 2016, Tetragon became a member of The Association of Investment Companies (AIC), the trade body for closed-ended investment companies. Founded in 1932, the AIC represents approximately 350 members across a broad range of closed-ended investment companies, incorporating investment trusts and other closed ended investment companies. Tetragon is classified by the AIC in its Flexible Investment sector as a company whose policy allows it to invest in a range of asset types. The AIC has indicated that the sector may assist investors and advisers to more easily find and compare those investment companies which have the ability to invest in a range of assets and allow investors to compare investment companies with similar open-ended funds.

            The AIC has a Code of Corporate Governance (AIC Code) which sets out a framework of best practice in respect of the governance of investment companies. The Board of Directors of Tetragon considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Corporate Governance Guide for Investment Companies (which incorporates the UK Corporate Governance Code), will provide better information to shareholders.

            Please see below for the 2019 AIC Code Principles and Provisions.

            The 2019 AIC Code Principles and Provisions
            Board leadership and purpose

            Principles

            A.
            A successful company is led by an effective board, whose role is to promote the long-term sustainable success of the company, generating value for shareholders and contributing to wider society. (Incorporates relevant content from UK Code Principle A)
             

            B.
            The board should establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned. All directors must act with integrity, lead by example and promote the desired culture. (UK Code Principle B)
             

            C.
            The board should ensure that the necessary resources are in place for the company to meet its objectives and measure performance against them. The board should also establish a framework of prudent and effective controls, which enable risk to be assessed and managed. (UK Code Principle C)
             

            D.
            In order for the company to meet its responsibilities to shareholders and stakeholders, the board should ensure effective engagement with, and encourage participation from, these parties. (UK Code Principle D)
             

             

            Provisions

            1.
            The board should assess the basis on which the company generates and preserves value over the long-term. It should describe in the annual report how opportunities and risks to the future success of the business have been considered and addressed, the sustainability of the company’s business model and how its governance contributes to the delivery of its strategy. For an investment company, the annual report should also include the company’s investment objective and investment policy. (Incorporates relevant content from UK Code Provision 1)
             

            Tetragon Compliance Statement 

            Tetragon’s investment objective is to generate distributable income and capital appreciation. Tetragon’s investment strategy to achieve that investment objective is stated in its Annual Report and on Tetragon’s website (under the heading Investment Strategy). 

            The Board of Directors does not hold separate strategy meetings, but overall strategy is discussed in detail at quarterly meetings of the Board of Directors and at ad hoc board meetings when required. Directors also have the opportunity to discuss these and any other matters with the investment manager outside of meetings of the Board of Directors as appropriate. 

            The investment manager provides a detailed investment report to the Board of Directors at quarterly board meetings across all key investment matrices including performance and allocation. The investment manager also provides a risk management update to the Board of Directors at quarterly meetings. Industry issues are raised and discussed. 

             

            2.
            The board should assess and monitor its own culture, including its policies, practices and behaviour to ensure it is aligned with the company’s purpose, values and strategy. (Incorporates relevant content from UK Code Provision 2)
             

            Tetragon Compliance Statement 

            The Board of Directors is made up of a broad range of professionally qualified or industry experienced personnel with relevant and suitable academic and professional backgrounds including a majority being Independent Directors. The Board of Directors believes this is an appropriate balance of skills, experience and knowledge that is relevant to Tetragon’s activities. 

             

            3.
            In addition to formal general meetings, the chair should seek regular engagement with major shareholders in order to understand their views on governance and performance against the company’s investment objective and investment policy. Committee chairs should seek engagement with shareholders on significant matters related to their areas of responsibility. The chair should ensure that the board as a whole has a clear understanding of the views of shareholders. (Incorporates relevant content from UK Code Provision 3)
             

            Tetragon Compliance Statement  

            The investment manager has been delegated responsibility for monitoring the shareholder profile of Tetragon and has in place a system for canvassing shareholder views and communicating views to the shareholders. The investment manager holds regular investor calls and an annual investor day. The investment manager provides the Board of Directors with comprehensive shareholder reports and corporate broker updates and analysis at meetings of the Board of Directors.  

            All major corporate communications are reviewed and approved by the Board of Directors. 

             

            4.
            When 20 per cent or more of votes have been cast against the board recommendation for a resolution, the company should explain, when announcing voting results, what actions it intends to take to consult shareholders in order to understand the reasons behind the result. An update on the views received from shareholders and actions taken should be published no later than six months after the shareholder meeting. The board should then provide a final summary in the annual report and, if applicable, in the explanatory notes to resolutions at the next shareholder meeting, on what impact the feedback has had on the decisions the board has taken and any actions or resolutions now proposed. (UK Code Provision 4)
             

            Tetragon Compliance Statement  

            Tetragon has 10 voting shares in issue, which were issued at par and are owned by Polygon Credit Holdings II Limited (the Voting Shareholder). The Voting Shareholder is a non-U.S. affiliate of Tetragon’s investment manager. 

            Tetragon’s voting shares are the only shares of Tetragon entitled to vote for the election of Tetragon’s board of directors and on all other matters, subject to the limited rights of the ordinary shares as described in Tetragon’s Memorandum and Articles of Incorporation. 

            Should the Voting Shareholder vote against a resolution proposed by the Board of Directors, the Board of Directors would engage with the Voting Shareholder to understand any concerns it may have. 

             

            5.
            The board should understand the views of the company’s other key stakeholders and describe in the annual report how their interests and the matters set out in section 172 of the United Kingdom’s Companies Act 2006 have been considered in board discussions and decision-making. The board should keep engagement mechanisms under review so that they remain effective. (Incorporates relevant content from UK Code Provision 5)
              

            Tetragon Compliance Statement 

            The Board of Directors have considered the matters set out in section 172 of the United Kingdom’s Companies Act 2006 insofar as Guernsey law requires consideration of the same. Tetragon has delegated the monitoring of and engagement with Tetragon’s key stakeholders to the investment manager. The investment manager engages regularly with key stakeholders by means of investor calls and on annual investor day. The investment manager provides comprehensive reports and updates on these matters at meetings of the Board of Directors. 

             

            6.
            The board should take action to identify and manage conflicts of interest, including those resulting from significant shareholdings, and ensure that the influence of third parties does not compromise or override independent judgement. (UK Code Provision 7)
             

            Tetragon Compliance Statement 

            Tetragon’s Articles of Incorporation require the members of the Board of Directors to disclose any conflicts of interest that they may have in relation to the company or a transaction upon becoming aware of such a conflict of interest. A member of the Board of Directors is not entitled to vote on a matter relating to a transaction, attend the relevant Board of Directors meeting, count in the quorum for any such meeting, sign any transactional document on behalf of Tetragon and do any other thing in his capacity as a director in relation to a transaction that they may be interested unless they have disclosed the nature and extent of their interest. 

             

            7.
            Where directors have concerns about the operation of the board or the company that cannot be resolved, their concerns should be recorded in the board minutes. On resignation, a non-executive director should provide a written statement to the chair, for circulation to the board, if they have any such concerns. (Incorporates relevant content from UK Code Provision 8)
             

             

            Tetragon’s Compliance Statement 

            The minutes of meetings of the Board of Directors of Tetragon record a summary of any concerns raised by members of the Board of Directors about the operation of the Board of Directors that cannot be resolved. To date, no written statement of concern has been provided by any retiring member of the Board of Directors. 

            Divisions of responsibilities

            Principles 

            F.
            The chair leads the board and is responsible for its overall effectiveness in directing the company. They should demonstrate objective judgement throughout their tenure and promote a culture of openness and debate. In addition, the chair facilitates constructive board relations and the effective contribution of all non-executive directors, and ensures that directors receive accurate, timely and clear information. (UK Code Principle F) 

            G.
            The board should consist of an appropriate combination of directors (and, in particular, independent non-executive directors) such that no one individual or small group of individuals dominates the board’s decision making. (Incorporates relevant content from UK Code Principle G)
             

            H.
            Non-executive directors should have sufficient time to meet their board responsibilities. They should provide constructive challenge, strategic guidance, offer specialist advice and hold third party service providers to account. (Incorporates relevant content from UK Code Principle H)
             

            I.
            The board, supported by the company secretary, should ensure that it has the policies, processes, information, time and resources it needs in order to function effectively and efficiently. (UK Code Principle I)
             

            Provisions 

            8.
            The responsibilities of the chair, senior independent director, board and committees should be clear, set out in writing, agreed by the board and made publicly available. The annual report should set out the number of meetings of the board and its committees, and the individual attendance by directors. (Incorporates relevant content from UK Code Provision 14)
             

            Tetragon’s Compliance Statement  

            The responsibilities of the members of the Board of Directors and Audit Committee are set out in the Corporate Governance section of the Tetragon website. Details of the number of meetings of the Board of Directors and Audit Committee is set out in Tetragon’s Compliance Statement for Provision 1. Tetragon has not appointed a senior independent director (see Provision 14 for additional information). 

             

            9.
            When making new appointments, the board should take into account other demands on directors’ time. Prior to appointment, significant commitments should be disclosed with an indication of the time involved. Additional external appointments should not be undertaken without prior approval of the board, with the reasons for permitting significant appointments explained in the annual report. (Incorporates relevant content from UK Code Provision 15)
              

            Tetragon’s Compliance Statement 

            Each Director is appointed annually by the Voting Shareholder in accordance with the process disclosed on Tetragon’s website and in its Annual Report. 

             

            10.
            At least half the board, excluding the chair, should be non-executive directors whom the board considers to be independent. The majority of the board should be independent of the manager. There should be a clear division of responsibilities between the board and the manager. (Incorporates relevant content from UK Code Provision 11)
             

            Tetragon’s Compliance Statement  

            Tetragon’s Articles of Incorporation require not less than a majority of the Directors to be Independent Directors. Currently more than a majority of the Board of Directors (three out of five) are Independent Directors. A member of the Board of Directors will be an “Independent Director” if the Board of Directors determines that the person satisfies the standards for independence contained in the UK Code in all material respects. The Board of Directors has undertaken an evaluation of the independence of each of the three Independent Directors. 

            The Board of Directors has delegated to the investment manager certain functions, including broad discretion to adopt an investment strategy and key operational issues. However, certain matters are specifically reserved for the Board of Directors under Tetragon’s Articles of Incorporation. 

             

            11.
            The chair should be independent on appointment when assessed against the circumstances set out in Provision 13. (Incorporates relevant content from UK Code Provision 9)
             

            Tetragon’s Compliance Statement  

            Tetragon has not appointed a permanent Chairman, but a chairman is elected for each meeting of the Board of Directors. An experienced Independent Director typically performs the role of chairman. All Directors have the opportunity to declare conflicts of interest at each meeting of the Board of Directors; such conflicts or potential conflicts are recorded in the relevant board minutes. 

             

            12.
            On appointment, and throughout the chair’s tenure, the chair should have no relationships that may create a conflict of interest between the chair’s interest and those of shareholders, including: 

            • being an employee of the manager or an ex-employee who has left the employment of the manager within the last five years; 
            • being a professional adviser who has provided services to the manager or the board within the last three years; or 
            • serving on any other boards of an investment company managed by the same manager. 

            Tetragon’s Compliance Statement 

            As noted above, Tetragon has not appointed a permanent Chairman. Instead a chairman is elected for each meeting of the Board of Directors. All members of the Board of Directors have the opportunity to declare any conflicts of interest that they may have at each meeting of the Board of Directors and the chairman is elected accordingly taking into account Provision 12.  

             

            13.
            The board should identify in the annual report each non-executive director it considers to be independent. Circumstances which are likely to impair, or could appear to impair, a non-executive director’s independence include, but are not limited to, whether a director:
             

             

            • has, or has had within the last three years, a material business relationship with the company or the manager, either directly or as a partner, shareholder, director or senior employee of a body that has such a relationship with the company or the manager; 
            • has received or receives additional remuneration from the company apart from a directors’ fee; 
            • has close family ties with any of the company’s advisers, directors or the manager; 
            • holds cross-directorships or has significant links with other directors through involvement in other companies or bodies. Directors who sit on the boards of more than one company managed by the same manager are entitled to serve as directors; however, they will not be regarded as independent for the purposes of fulfilling the requirement that there must be an independent majority; 
            • represents a significant shareholder; or 
            • has served on the board for more than nine years from the date of their first appointment. 

            Where any of these or other relevant circumstances apply, and the board nonetheless considers that the non-executive director is independent, a clear explanation should be provided. (Incorporates relevant content from UK Code Provision 10) 

            Tetragon’s Compliance Statement 

            The Independent Directors have been identified on its website and in the Governance section of its Annual Report (see Provision 10 for additional information). 

             

            14.
            The board should appoint one of the independent non-executive directors to be the senior independent director to provide a sounding board for the chair and serve as an intermediary for the other directors and shareholders. Led by the senior independent director, the non-executive directors should meet without the chair present at least annually to appraise the chair’s performance, and on other occasions as necessary. (UK Code Provision 12)
             

            Tetragon’s Compliance Statement 

            Tetragon has not appointed a senior Independent Director. The Board of Directors evaluates Tetragon’s and its own performance by means of open discussion at meetings of the Board of Directors or as otherwise required. The absence of a permanent chairman means that there is no need for the Independent Directors to meet separately to evaluate the chairman’s performance. 

             

            15.
            The primary focus at regular board meetings should be a review of investment performance and associated matters such as gearing, asset allocation, attribution analysis, marketing/investor relations, peer group information and industry issues.
             

            Tetragon’s Compliance Statement 

            The Board of Directors meets regularly to review and discuss the reports of the investment manager and to deal with any other corporate governance matters that may arise from time to time. The Board of Directors discussions include, as appropriate and necessary, those matters referenced by Provision 15. 

             

            16.
            The board should explain in the annual report the areas of decision making reserved for the board and those over which the manager has discretion. Disclosure should include:
             

            • a discussion of the manager’s overall performance, for example, investment performance, portfolio risk, operational issues such as compliance etc.; 
            • the manager’s remit regarding stewardship, for example voting and shareholder engagement, and environmental, social and corporate governance issues in respect of holdings in the company’s portfolio. 

            The board should also agree policies with the manager covering key operational issues.  

            Tetragon’s Compliance Statement 

            Tetragon has delegated management of Tetragon’s investment portfolio, determination of Tetragon’s investment strategy, approval of all significant investments by Tetragon, oversight of Tetragon’s risk monitoring, responsibility for portfolio risk management and oversight of key non-investment and risk activities to the investment manager. 

            Those roles and responsibilities not delegated to the investment manager are retained by the Board of Directors, along with general oversight of the activities of the investment manager. The Board of Directors oversees the performance by the investment manager of its duties through regular consideration of reports and presentations from the investment manager at quarterly meetings. 

            Tetragon’s administrator, TMF Group Fund Administration (Guernsey) Limited, circulates ad hoc updates from Tetragon’s regulator, the GFSC, and TMF’s compliance function monitors performance within the relevant Guernsey laws and GFSC rules and advises the Board of Directors of any issues or likely issues (generally on a quarterly basis).  

            Full details of the role and responsibilities of the Board, the investment manager, the administrator and other relevant service providers are detailed on Tetragon’s website. 

             

            17.
            Non-executive directors should review at least annually the contractual relationships with, and scrutinise and hold to account the performance of, the manager.
             

            Either the whole board or a management engagement committee consisting solely of directors independent of the manager (or executives) should perform this review at least annually with its decisions and rationale described in the annual report. If the whole board carries out this review, it should explain in the annual report why it has done so rather than establish a separate management engagement committee. 

            The company chair may be a member of, and may chair, the management engagement committee, provided that they are independent of the manager. (Incorporates relevant content from UK Code Provision 13)  

            Tetragon’s Compliance Statement  

            The Board of Directors has not deemed it necessary to appoint a separate management engagement committee. The Independent Directors undertake such functions as necessary on an ongoing basis. 

             

            18.
            The board should monitor and evaluate other service providers (such as the company secretary, custodian, depositary, registrar and broker).
             

            The board should establish procedures by which other service providers, should report back and the methods by which these providers are monitored and evaluated. 

            Tetragon’s Compliance Statement  

            Tetragon has delegated the monitoring and evaluation of its service providers to the investment manager. The investment manager raises relevant issues with the Board of Directors as appropriate. 

             

            19.
            All directors should have access to the advice of the company secretary, who is responsible for advising the board on all governance matters. Both the appointment and removal of the company secretary should be a matter for the whole board. (UK Code Provision 16)
             

            Tetragon’s Compliance Statement 

            The investment manager makes recommendations to the Board of Directors in relation to relevant governance matters. These recommendations are considered by the Board of Directors during the course of regular meetings. 

             

            20.
            The directors should have access to independent professional advice at the company’s expense where they judge it necessary to discharge their responsibilities properly.
             

            Tetragon’s Compliance Statement 

            All Directors have access to independent professional advice to enable them to properly discharge their responsibilities. 

             

            21.
            Where a new company has been created by the manager, sponsor or other third party, the chair and the board should be selected and bought into the process of structuring a new launch at an early stage.
             

            Tetragon’s Compliance Statement 

            Tetragon was established in 2005. Accordingly, this Provision is not applicable to Tetragon.  

            Composition, succession and evaluation

            Principles 

            J.
            Appointments to the board should be subject to a formal, rigorous and transparent procedure, and an effective succession plan should be maintained. Both appointments and succession plans should be based on merit and objective criteria and, within this context, should promote diversity of gender, social and ethnic backgrounds, cognitive and personal strengths. (Incorporates relevant content from UK Code Principle J)
             

            K.
            The board and its committees should have a combination of skills, experience and knowledge. Consideration should be given to the length of service of the board as a whole and membership regularly refreshed. (UK Code Principle K)
             

            L.
            Annual evaluation of the board should consider its composition, diversity and how effectively members work together to achieve objectives. Individual evaluation should demonstrate whether each director continues to contribute effectively. (UK Code Principle L)
             

             

            Provisions 

            22.
            The board should establish a nomination committee to lead the process for appointments, ensure plans are in place for orderly succession to the board and oversee the development of a diverse pipeline for succession. A majority of members of the committee should be independent non-executive directors. If the board has decided that the entire board should fulfil the role of the nomination committee, it will need to explain why it has done so in the annual report. The chair of the board should not chair the committee when it is dealing with the appointment of their successor. (Incorporates relevant content from UK Code Provision)
              

            Tetragon’s Compliance Statement  

            The Board of Directors has not deemed it necessary to appoint a nomination committee and undertakes any such functions collectively or it is undertaken by the Voting Shareholder. 

             

            23.
            All directors should be subject to annual re-election. The board should set out in the papers accompanying the resolutions to elect each director the specific reasons why their contribution is, and continues to be, important to the company’s long-term sustainable success. (UK Code Provision 18)
              

            Tetragon’s Compliance Statement  

            Directors are submitted for re-election by the Voting Shareholder at the Annual General Meeting and the procedures for re-election are disclosed in Tetragon’s Annual Report and on the Tetragon website. 

             

            24.
            Each board should determine and disclose a policy on the tenure of the chair. A clear rationale for the expected tenure should be provided, and the policy should explain how this is consistent with the need for regular refreshment and diversity. (Incorporates relevant content from UK Code Provision 19)
             

            Tetragon’s Compliance Statement 

            Tetragon does not operate a maximum threshold for tenure, nor any guaranteed tenure. As such, the Board of Directors has not deemed it necessary to prepare such a policy. 

             

            25.
            Open advertising and/or an external search consultancy should generally be used for the appointment of the chair and non-executive directors. If an external search consultancy is engaged it should be identified in the annual report alongside a statement about any other connection it has with the company or individual directors. (UK Code Provision 20)
             

            Tetragon’s Compliance Statement 

            All vacancies on the Board of Directors may be filled, and additional members may be appointed, by resolution of the Voting Shareholder. 

             

            26.
            There should be a formal and rigorous annual evaluation of the performance of the board, its committees, the chair and individual directors. The chair should consider having a regular externally facilitated board evaluation. In FTSE 350 companies this should happen at least every three years. The external evaluator should be identified in the annual report and a statement made about any other connection it has with the company or individual directors. (UK Code Provision 21)
             

            Tetragon’s Compliance Statement 

            The Board of Directors evaluates its own performance and effectiveness, including of individual members of the Board of Directors and committees, by open discussion in Board of Directors meetings. 

             

            27.
            The chair should act on the results of the evaluation by recognising the strengths and addressing any weaknesses of the board. Each director should engage with the process and take appropriate action when development needs have been identified. (UK Code Provision 22)
             

            Tetragon’s Compliance Statement  

            All members of the Board of Directors engage in the evaluation process and take appropriate action when developmental needs have been identified. 

             

            28.
            The annual report should describe the work of the nomination committee, (including where the whole board is acting as the nomination committee) including:
             

            • the process used in relation to appointments, its approach to succession planning and how both support developing a diverse pipeline; 
            • how the board evaluation has been conducted, the nature and extent of an external evaluator’s contact with the board and individual directors, the outcomes and actions taken, and how it has or will influence board composition; and 
            • the policy on diversity and inclusion, its objectives and linkage to company strategy, how it has been implemented and progress on achieving the objectives. (Incorporates relevant content from UK Code Provision 23) 

            Tetragon’s Compliance Statement 

            As noted in relation to Provision 22, the Board of Directors has not deemed it necessary to appoint a nomination committee. The Board of Directors are collectively responsible for ensuring that the provisions of Tetragon’s Articles of Incorporation and of the relevant legislation, regulations and policies are followed in relation to the appointment and evaluation of the Directors. 

            Audit, risk and internal control

            Principles 

            M.
            The board should establish formal and transparent policies and procedures to ensure the independence and effectiveness of external audit functions and satisfy itself on the integrity of financial and narrative statements. (Incorporates relevant content from UK Code Principle M)
             

            N.
            The board should present a fair, balanced and understandable assessment of the company’s position and prospects. (UK Code Principle N)
             

            O.
            The board should establish procedures to manage risk, oversee the internal control framework, and determine the nature and extent of the principal risks the company is willing to take in order to achieve its long-term strategic objectives. (UK Code Principle O) 

             

            Provisions

            29.
            The board should establish an audit committee of independent non-executive directors, with a minimum membership of three, or in the case of smaller companies two. The chair of the board should not chair the committee but can be a member if they were independent on appointment. If the chair of the board is a member of the audit committee, the board should explain in the annual report why it believes this is appropriate. The board should satisfy itself that at least one member has recent and relevant financial experience. The committee as a whole shall have competence relevant to the sector in which the company operates. (Incorporates relevant content from UK Code Provision 24)
             

            Tetragon’s Compliance Statement 

            The Board of Directors has established an Audit Committee comprised of the three Independent Directors. The Audit Committee has recent and relevant financial experience. As noted in Provision 11, there is no permanent chairman for Tetragon. Similarly, there is no permanent chairman of the Audit Committee. 

             

            30.
            The main roles and responsibilities of the audit committee should include:
             

            • monitoring the integrity of the financial statements of the company and any formal announcements relating to the company’s financial performance, and reviewing significant financial reporting judgements contained in them; 
            • providing advice (where requested by the board) on whether the annual report and accounts, taken as a whole, is fair, balanced and understandable, and provides the information necessary for shareholders to assess the company’s position and performance, business model and strategy; 
            • reviewing the company’s internal financial controls and internal control and risk management systems, unless expressly addressed by a separate board risk committee composed of independent non-executive directors, or by the board itself; 
            • conducting the tender process and making recommendations to the board, about the appointment, reappointment and removal of the external auditor, and approving the remuneration and terms of engagement of the external auditor; 
            • reviewing and monitoring the external auditor’s independence and objectivity; 
            • reviewing the effectiveness of the external audit process, taking into consideration relevant UK professional and regulatory requirements; 
            • developing and implementing policy on the engagement of the external auditor to supply non-audit services, ensuring there is prior approval of non-audit services, considering the impact this may have on independence, taking into account the relevant regulations and ethical guidance in this regard, and reporting to the board on any improvement or action required; and 
            • reporting to the board on how it has discharged its responsibilities. (Incorporates relevant content from UK Code Provision 25) 

            Tetragon’s Compliance Statement  

            The Audit Committee’s remit covers those matters identified by Provision 30. More specifically, the Audit Committee is responsible for, among other items, assisting and advising the Board of Directors with matters relating to Tetragon’s accounting and financial reporting processes and the integrity and audits of Tetragon’s financial statements. The Audit Committee is also responsible for reviewing and making recommendations with respect to the plans and results of each audit engagement with Tetragon’s independent accountants, the audit and non-audit fees charged by the independent accountants and the adequacy of internal accounting controls. 

             

            31.
            The annual report should describe the work of the audit committee including:
             

            • the significant issues that the audit committee considered relating to the financial statements, and how these issues were addressed; 
            • an explanation of how it has assessed the independence and effectiveness of the external audit process and the approach taken to the appointment or reappointment of the external auditor, information on the length of tenure of the current audit firm, when a tender was last conducted and advance notice of any retendering plans; 
            • in the case of a board not accepting the audit committee’s recommendation on the external auditor appointment, reappointment or removal, a statement from the audit committee explaining its recommendation and the reasons why the board has taken a different position (this should also be supplied in any papers recommending appointment or reappointment); and 
            • an explanation of how auditor independence and objectivity are safeguarded, if the external auditor provides non-audit services. (Incorporates relevant content from UK Code Provision 26) 

            Tetragon’s Compliance Statement  

            The Audit Committee’s Statement can be found in the Governance section of Tetragon’s Annual Report. 

             

            32.
            The directors should explain in the annual report their responsibility for preparing the annual report and accounts, and state that they consider the annual report and accounts, taken as a whole, is fair, balanced and understandable, and provides the information necessary for shareholders to assess the company’s position, performance, business model and strategy. (UK Code Provision 27)
             

            Tetragon’s Compliance Statement 

            Please refer to the Directors’ Report in the Tetragon Annual Report. 

             

            33.
            The board should carry out a robust assessment of the company’s emerging and principal risks. The board should confirm in the annual report that it has completed this assessment, including a description of its principal risks, what procedures are in place to identify emerging risks, and an explanation of how these are being managed or mitigated. (UK Code Provision 28)
              

            Tetragon’s Compliance Statement  

            Tetragon has delegated the key responsibilities in relation to the assessment of Tetragon’s emerging and principal risks to the investment manager. Details of these risks are set out in Tetragon’s Annual Report and on its website (under the heading Risk Factors). 

             

            34.
            The board should monitor the company’s risk management and internal control systems and, at least annually, carry out a review of their effectiveness and report on that review in the annual report. The monitoring and review should cover all material controls, including financial, operational and compliance controls. (UK Code Provision 29)
             

            Tetragon’s Compliance Statement 

            Tetragon has delegated the key responsibilities in relation to the management of Tetragon’s risk management and internal control systems to the investment manager. Details of the investment manager’s review is included in the Manager’s Review section of Tetragon’s Annual Report. 

             

            35.
            In annual and half-yearly financial statements, the board should state whether it considers it appropriate to adopt the going concern basis of accounting in preparing them, and identify any material uncertainties to the company’s ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements. (UK Code Provision 30)
             

            Tetragon’s Compliance Statement 

            The Board of Directors complies with this provision as detailed in the Directors’ Report and Financial Statements in Tetragon’s Annual Report. 

             

            36.
            Taking account of the company’s current position and principal risks, the board should explain in the annual report how it has assessed the prospects of the company, over what period it has done so and why it considers that period to be appropriate. The board should state whether it has a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, drawing attention to any qualifications or assumptions as necessary. (UK Code Provision 31)
             

            Tetragon’s Compliance Statement  

            The Board of Directors complies with this provision as detailed in the Directors’ Report and Key Performance Metrics in the Annual Report. 

            Remuneration

            Principles 

            P.
            Remuneration policies and practices should be designed to support strategy and promote long-term sustainable success. (Incorporates relevant content from UK Code Principle P) 

            Q.
            A formal and transparent procedure for developing policy remuneration should be established. No director should be involved in deciding their own remuneration outcome. (Incorporates relevant content from UK Code Principle Q)
             

            R.
            Directors should exercise independent judgement and discretion when authorising remuneration outcomes, taking account of company and individual performance, and wider circumstances. (UK Code Principle R)
             

             

            Provisions 

            37.
            The board should establish a remuneration committee of independent non-executive directors with a minimum membership of three, or in the case of smaller companies, two. In addition, the chair of the board can only be a member if they were independent on appointment and cannot chair the committee. Before appointment as chair of the remuneration committee, the board should satisfy itself that the appointee has relevant experience and understanding of the company. If the board has decided that the entire board should fulfil the role of the remuneration committee, it will need to explain why it has done so in the annual report. (Incorporates relevant content from UK Code Provision 32)
             

            Tetragon’s Compliance Statement  

            The Board of Directors has not deemed it necessary to establish a remuneration committee. To the extent necessary the members of the Board of Directors collectively fulfill the role of a remuneration committee. 

             

            38.
            The remuneration committee should have delegated responsibility for determining the policy and setting the remuneration for the chair. (Incorporates relevant content from UK Code Provision 33)
             

            Tetragon’s Compliance Statement 

            See above in relation to Provision 37. 

             

            39.
            The remuneration of non-executive directors should be determined in accordance with the Articles of Association or, alternatively, by the board. Levels of remuneration for the chair and all non-executive directors should reflect the time commitment and responsibilities of the role. Remuneration for all non-executive directors should not include share options or other performance-related elements. Provision should be made for additional directors’ fees where directors are involved in duties beyond those normally expected as part of the director’s appointment. In such instances the board should provide details of the events, duties and responsibilities that gave rise to any additional directors’ fees in the annual report. (Incorporates relevant content from UK Code Provision 34)
             

            Tetragon’s Compliance Statement  

            The remuneration of Tetragon’s Independent Directors has been determined by the Board of Directors. The remuneration of the Independent Directors reflects a number of factors, including the time commitment and responsibilities of the role. The remuneration currently includes restricted Tetragon share grants and the opportunity to invest on preferential fee terms in TFG Asset Management products. 

             

            40.
            Where a remuneration consultant is appointed, this should be the responsibility of the remuneration committee. The consultant should be identified in the annual report alongside a statement about any other connection it has with the company or individual directors. Independent judgement should be exercised when evaluating the advice of external third parties. (Incorporates relevant content from UK Code Provision 35)
             

            Tetragon’s Compliance Statement 

            Tetragon has not appointed a remuneration consultant. 

             

            41.
            The main role and responsibilities of the remuneration committee should include:
             

            • in conjunction with the chair, setting the directors’ remuneration levels; and 
            • considering the need to appoint external remuneration consultants. 

            Tetragon’s Compliance Statement  

            See above in relation to Provision 37. 

             

            42.
            There should be a description of the work of the remuneration committee in the annual report. (Incorporates relevant content from UK Code Provision 41)
             

            Tetragon’s Compliance Statement 

            See above in relation to Provision 37. 

             

            Edison Investment Research Limited

            Tetragon has commissioned Edison Group to publish reports regarding Tetragon. Tetragon expects Edison to publish updates on a quarterly basis. 

            Edison is an international equity research and investor access firm with a team of more than 110 analysts, investment and roadshow professionals and works with both large and smaller capitalised companies, blue chip institutional investors, wealth managers, private equity and corporate finance houses to support their capital markets activity. Edison provides services to more than 400 retained corporate and investor clients from offices in London, New York, Frankfurt, Sydney and Wellington. For further information, please visit: www.edisongroup.com. Edison is authorised and regulated by the Financial Conduct Authority. 

             

             

             

            Paul Gannon, Chief Financial Officer with members of Finance Team

            Share price history

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