Monthly Update For October 2012
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. --------------------------------------------------