MicroValue

Tetragon announces dividend and a tender offer. I had hope they would announce a tender offer. At such a large discount to book, a tender offer is highly accretive to NAV and clears out sellers. The tender is occurring at an opportune time! In my taxable account, I intend to sell before year end, take short term gains at max rates, and avoid filing a PFIC. I plan on holding in my IRAs where there are no tax issues. MV

Tetragon has been trading as low as 12.05 in Amsterdam and 11.94 OTC (although higher than that now OTC). Has anyone heard news on it? I suppose some investors were disappointed on no buyback news, but with an NAV of $20ish it still seems like a good deal in an expensive market.

Tetragon will soon announce another tender offer for $50 million. Accretive to NAV, clear out more sellers. It has me quite pleased.

Tetragon reports results with diluted NAV at 19.96 up just under a $1.00, in line with expectations. Dividend a very slight increase, but I like the signaling that the dividend appears here to stay. Getting paid 6.7% to wait at almost a 50% discount to NAV leaves enough margin for error in my view for market volatility, a unfavorable fee structure, and slop in the NAV calculation. And next year if shares are still hanging out in this area, I will press for another tender offer.

Yes VIC has good write ups. You can access company press releases on tetragoninv.com or look at the yahoo symbol tfg.as

SOTP valuation is ok, but its not NAV. KKR appears to trade at a premium to book value so what great asset does it have that is not properly reflected on its balance sheet? If you aren't a value-based NAV investor, which you don't seem to be, then maybe Tetragon is not for you. Tetragon could well to continue to trade at a discount to NAV, but there are several possible catalysts 1. Latest tender offers cleared out 85% of the sellers at 10.00, leaving room for stock to appreciate once the 15% of sellers have unloaded their position. 2. A huge chunk of management stock options priced at 10 expires in April 2017. Management may juice the stock in front of option expiration and either way it will be nice to get those off of the balance sheet so we start to get cleaner NAVs. 3. Possible spin-off of asset management business. 4. The accretive nature of buying back stock at a 50% discount is tremendous -- an immediate 100% risk-free NAV return on each dollar spent. Even if the discount is 30%, there is tremendous value in buying back shares. And for once the company did the right thing by buying back without enriching themselves too 5. Management keeps increasing insider ownership of stock. At some point they may own enough where they get tired of the low stock price and restructure the company to boost the stock price. 6. Everything else is overvalued so this looks like the best value in the market right now, and in the past when I have encountered situations like that, I am either missing something big or the stock catches up to the market. CLO exposure is only a portion of the NAV and has been trending lower over time. Buybacks are not equivalent to liquidation -- look at all the big banks buying back stock. Tetragon has plenty of cash and large enough assets that the buybacks would juice the stock price before the company gets anywhere close to liquidation mode. Anyway what alternative uses of cash are so great right now? Almost all asset classes pretty expensive to me.

You did bring up one of the issues that I wanted to clarify with investor relations -- their method for accounting for dilution of the $10 options seems to grossly understate the impact of their dilution unless you assume they are coupled with a tender offer to offset the impact. Hopefully they have something like that in mind or else I don't see how they justify their calculation. By the way, I have been the one pestering them with questions regarding a tender/buyback for the last several conference calls. The latest tender has placated me for now, but I definitely want to revisit this topic early next year. It'd be helpful if someone else took up the banner -- I am surprised that other hedge fund investors don't bring it up given how it creates so much no-risk value.

Anyone still involved with this? I echo the sentiments on the board -- management is smart and kind of slimy, the fee structure is horrible but the yield and discount (almost 50% now) are too large to pass up IMO. On the positive side, the latest tender offer cleared out most of the $10 sellers (85% proration meaning 1.5 million shares left, could be a nice pop once they are cleared out), and it actually demonstrates management working in its shareholders interests. The latest tender offer should add roughly $1.00 to NAV. Due to Brexit, there will be a writedown on Tetragon's British infrastructure investments, but they do hedge currencies so hopefully not so bad. Finally, there are 12.5 million options with a strike of 10 that expire April 2017. Management may try to juice up the stock price before those expire in the meantime we are getting 6.5% yield in a market where almost everything is overvalued.