Tetragon Financial (LON:TFG) reported a negative first-half return in 2026 as declines in private equity, venture capital and direct equity holdings outweighed gains from its asset-management investments.
Fully diluted net asset value per share was $40.06 as of June 30, down from $41.88 at the end of 2025. NAV per-share total return was negative 2.5% for the first half, while return on equity, net of fees and expenses, was negative 4.5%.
The company declared a second-quarter dividend of $0.12 per share, unchanged from the first quarter. Dear said the dividend represented an annualized yield of approximately 3.6%.
Portfolio losses led by Ripple and UiPath
Tetragon recorded an aggregate investment loss of $131.4 million during the first half. The largest drag came from private equity and venture capital investments, which lost $138.9 million.
Chief Executive Officer Steve Prince said the loss was principally attributable to Tetragon’s holdings of Series A and B preferred shares in Ripple Labs. The private-market price observed for Ripple shares fell to $109 at the end of June from $150 at the end of 2025, resulting in a $125.5 million loss in the direct private-equity portfolio.
Other direct private equity funds and co-investments lost $5.5 million across 44 positions, while Banyan Square portfolio companies generated a $7.9 million loss.
Tetragon’s other equities and credit segment lost $69.2 million. Prince said the result was driven by an unrealized loss on UiPath shares, which represented about 70% of the segment’s value and was Tetragon’s fifth-largest holding at the reporting date. He cited broad compression in software-sector valuation multiples amid concerns over AI-driven displacement, while saying the company believes UiPath’s agentic automation offerings could benefit from broader AI adoption.
Equity funds lost $39.8 million overall. Hawke’s Point resource-finance funds and co-investments declined by $61.2 million amid mark-to-market losses and a metals-sector sell-off. Westbourne River’s European event-driven strategies lost $29 million, reflecting weakness in European dislocation and corporate restructuring trades and losses on portfolio hedges.
Those losses were partly offset by a $46.2 million gain at the Tetragon Life Sciences Fund. During the period, Tetragon invested $141 million in the fund and received $115 million from investment sales.
BGO transaction boosts asset-management investments
Private equity investments in asset-management companies, collectively referred to as Tetragon Partners, generated a $120.2 million gain during the period. The result was led by BGO and Equitix.
Tetragon’s investment in Equitix gained $34.4 million, with the valuation rising 1% due to higher EBITDA used in the market-multiples approach. The company also received a $17.9 million dividend from Equitix.
BGO contributed a $191 million first-half gain. In February, Sun Life exercised a call option involving Tetragon’s approximately 13% interest in BGO as of Dec. 31. Tetragon received $294.5 million, net of taxes, in the first half from the call option and related payments, which was $36 million above the year-end valuation of the position.
Tetragon also agreed to relinquish certain ongoing BGO rights in exchange for $155 million from Sun Life. The company said those rights had previously been valued at zero. It retained ownership of carried interest in certain GreenOak and BGO real estate funds, valued at $66.6 million, which was transferred to the real estate category.
LCM, Tetragon’s bank-loan asset manager, generated a $63.8 million loss. Following a strategic review, Tetragon exited the CLO management business, selling LCM’s collateral-management contracts to Clearlake Capital Group in June for $40.5 million in upfront consideration, net of transaction fees. The company valued future contingent payments at $2.8 million at June 30.
Cash deployment and balance sheet
Tetragon ended June with $43.6 million of cash at bank and $185 million drawn on its $500 million revolving credit facility, which matures in December 2034. Including broker balances and net receivables and payables, the company reported net cash of negative $135.8 million.
During the first half, Tetragon used $558.2 million to make investments, $71.8 million to repurchase shares and $10.4 million to pay dividends. It received $863.7 million of cash from distributions and investment-sale proceeds. Future cash commitments totaled $87.9 million.
Dear said the principals of the investment manager and Tetragon Partners employees owned 42.2% of public shares at the end of June, up from 39.4% at year-end. He also said the company announced an additional share buyback, though no terms were discussed on the call.
Addressing investor questions regarding the discount between the share price and NAV, Dear said approximately 40% of assets were classified as Level 1 and Level 2, while Equitix and Ripple provided additional externally observable valuation references. He said Tetragon’s efforts to address the discount include seeking stronger investment performance, explaining its complex investment strategy to the market, and returning capital through dividends and repurchases.
About Tetragon Financial (LON:TFG)
Tetragon is a Guernsey closed-ended investment company. Its non-voting shares are listed on Euronext in Amsterdam, a regulated market of Euronext Amsterdam N.V., and also traded on the Specialist Fund Segment of the Main Market of the London Stock Exchange. Our investment manager is Tetragon Financial Management LP. Find out more at www.tetragoninv.com.
