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Tuesday 20 November, 2012

Tetragon Financial Group Limit

Tetragon Financial Group Limited (TFG) Monthly


    Tetragon Financial Group Limited (TFG) is a Guernsey closed-ended investment
company
traded on the NYSE Euronext in Amsterdam under the ticker symbol "TFG".

    In this monthly update, unless otherwise stated, we report on the 
consolidated
business incorporating TFG and Tetragon Financial Group Master Fund Limited.[1]

    Net Asset Value Estimates as of October 31 2012

    (Amounts provided are unaudited and subject to change)

<pre>    
                                                  (in millions except per
                                                  share data)
    Estimated Fair Value of Investments:          $1,324.7
    Cash and Cash Equivalents:                    $352.1
    Net Other Assets / (Liabilities):             $13.2
    Estimated Net Asset Value:                    $1,690.0
    TFG Shares Outstanding:                       133.0
    Net Asset Value per Share:[2][3]              $14.88
</pre><pre>    
    Expected Upcoming Events           Date
    November 2012 Monthly Report       December 20, 2012 (approx)
</pre>    --------------------------------------------------

    1.) TFG invests substantially all its capital through a master fund, 
Tetragon
Financial Group Master Fund Limited ("TFGMF") in which it holds a 100% share.

    2.) Excludes 6.5 million shares held in treasury, 1.2 million shares held by
a
subsidiary and 11.7 million shares held in escrow.

    3.) NAV per share was reduced by $0.115 in October 2012 to reflect the 
approval of the
quarterly dividend relating to Q3 2012.

    This release does not contain or constitute an offer to sell or a 
solicitation of an
offer to purchase securities in the United States or any other jurisdiction. The
securities of TFG have not been and will not be registered under the US 
Securities Act of
1933 (the "Securities Act"), as amended, and may not be offered or sold in the 
United
States or to US persons unless they are registered under applicable law or 
exempt from
registration. TFG does not intend to register any portion of its securities in 
the United
States or to conduct a public offer of securities in the United States. In 
addition, TFG
has not been and will not be registered under the US Investment Company Act of 
1940, and
investors will not be entitled to the benefits of such Act. TFG is registered in
the
public register of the Netherlands Authority for the Financial Markets under 
Section 1:107
of the Financial Markets Supervision Act ("FMSA") as a collective investment 
scheme from a
designated country. This release constitutes regulated information 
("gereglementeerde
informatie") within the meaning of Section 1:1 of the FMSA.

                            Tetragon Financial Group Limited (TFG)

                               Monthly Update For October 2012

    Investment Composition:

    As of the end of October 2012, the majority of the net assets of the company
were
invested in the equity tranches of U.S. CLOs. The remainder of net assets was 
invested in
cash or equivalents less certain net liabilities, U.S. senior secured loans, 
equity
tranches of European CLOs, asset management businesses, real estate funds, and 
CLO
mezzanine tranches.

    The geographical allocation of TFG's CLO equity, direct loan, and real 
estate fund
investments was weighted primarily towards the United States, at 90.9% of such 
assets as
of the end of October 2012. European exposure was approximately 8.9% and Asia 
was
approximately 0.2%. TFG's ownership of asset managers is excluded from the 
geographic
allocation above as such managers are global in nature.

    Additional Information:

    Net Asset Value per Share for TFG as at October 31, 2012 was $14.88, up from
$14.29 as
at September 30, 2012.[4]

    As announced on October 29, 2012, TFG acquired Polygon Management L.P. and 
certain of
its affiliates (collectively, "Polygon"), an alternative asset manager, for 
approximately
11.7 million TFG non-voting shares (the "Escrow Shares) in an all share deal on
October
28, 2012 (the "Polygon Transaction"). For further information on the 
transaction, please
see the applicable press release and investor presentation on the company's 
website
(http://www.tetragoninv.com).

    TFG financial reporting is based on U.S. generally accepted accounting 
principles ("US
GAAP"). With respect to the Polygon Transaction, certain US GAAP rules 
applicable to the
acquisition of management contracts and investments, the purchase of minority 
interests,
and the use of deferred shares in business combinations, resulted in, among 
other things,
the recognition of the value of certain of the acquired Polygon assets on the 
company's
balance sheet as at October 31, 2012 and the Escrow Shares not being recognized
as issued
in terms of the calculation of NAV per Share until such shares fully vest.

    --------------------------------------------------

    4.) Excludes 6.5 million shares held in treasury, 1.2 million shares held by
a
subsidiary and 11.7 million shares held in escrow.

    Accordingly, the acquisition of Polygon had the effect of increasing NAV per
Share by
$0.482 as at October 31, 2012. No incentive fees were earned or paid as a result
of the
Polygon Transaction as the transaction was treated as a capital adjustment for 
the
applicable calculations.

    The table below shows the main elements of the movement in the NAV per Share
in
October 2012:

<pre>    
                                             $ per Share
    NAV per share as at September 30, 2012     14.292
    Add: EPS per Share for October 2012         0.217
    Less: Payment of Q3 2012 dividend          (0.115)
    NAV per Share before Polygon Transaction   14.394
    Increase due to Polygon Transaction         0.482
    NAV per Share as at October 31, 2012       14.876
</pre><pre>
    For further information, please contact:
    TFG:
    David Wishnow/Yuko Thomas
    Investor Relations
    [email protected]
    Press Inquiries:
    Brunswick Group
    Andrew Garfield/Gill Ackers/Brian Buckley
    +44-20-7404-5959
    [email protected]
</pre>
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