Paddy Dear - Investment & Risk Committee Chair, Executive Committee Steve Prince - Investment & Risk Committee, Executive Committee, Head of North America Mike Rosenberg - Investment & Risk Committee Phil Bland - Executive Committee, CFO

Good afternoon. Thank you for joining Tetragon's 2015 Annual Report Investor Call. You are all in listen-only mode. The call will be accompanied by a live presentation, which can be viewed online by registering at the link provided in the company's conference call press release. This press release can be found on the Homepage of the company's Web site, www.tetragoninv.com. In addition, questions can be submitted online while watching the presentation. As a reminder, this conference call is being recorded. I will now turn over to you, Paddy Dear to commence the presentation.

Thanks very much and good morning and good afternoon everyone. As one of the Principals and Founders of the Investment Manager of Tetragon Financial Group Limited, I'd like to welcome you all to our investor call, which will focus on the company's 2015 annual results. I'll give an introduction; Phil Bland, our CFO will review the company's financial performance for 2015; Mike Rosenberg, Steve Prince and I will talk through some of the details for 2015 and we will conclude with some update on recent initiatives of the company. We'll also as in previous calls take questions electronically via our web-based system at the end of the presentation and we plan to answer certain questions received since the last update. As always, I would like to remind everyone that the following may contain forward-looking comments including statements regarding the intensions, belief or current expectations concerning the performance and financial condition on the products and markets in which Tetragon invests. And our performance may change materially, as a result of various possible events or factors. We are moving to the first slide, people will have seen this one before, obviously updated for the year end. Tetragon has now been in business for over 10 years and just coming up for about 9 years in the public market. The return on equity target from inception of being 10% to 15% net to investors and the average over those 9 years in the public market is around about 13.5% and that includes the 14.5% fair value and general equity achieved in 2015 more of which we will be talking about in this presentation. Shareholder returns have obviously been more volatile 77% compound since IPO and 18% compound over the last five years. The dividend with which conception has been targeted as 30% to 50% of normalized earnings and is currently yielding over 7% for the company and obviously as investors know we have a progressive dividend policy. And lastly, worth pointing out that the NAV of the company is round about $2 billion for a meaningful [indiscernible]. Moving on to the investment strategy, again, a lot of people would have seen this before and so familiar to many of you, but just to reiterate at Tetragon, we're looking for asset classes that are attractive. We are looking for management team that we believe to be superior and we like to structure investments with these management team. And in some cases own some or all of the asset management business and our TFG asset for both the passive investments and the operating asset management businesses. These asset management businesses where we do own some of them have grown over the years and collectively we call it TFG Asset Management and that represent about 20% of the fair value NAV of the company. And by way of remainder, as we said at the first part and reiterated in the quarterlies, we are potentially looking to IPO this part of this business, the TFG Asset Management on a three to five year time horizon. So my last slide for the introduction is just a snapshot of how the business looks at the end of 2015. On the left, you have a pie-chart showing the breakdown by the asset classes and types and on the right, by NAV, the top ten holdings of the company. I think the relevance then if you like to take away from this slide is firstly that all our investments have an alternative. Secondly, to reiterate we have assets as well as the operating asset managers complete the strong synergy between the two. We have a very diversified portfolio of assets and as you can see from the top 10 holdings on the right, the focus is very much on private and indeed but both assets that can't easily be replicated in the financial market. So, without that as an introduction, I'd like to now hand over to Phil Bland, our CFO to discuss the key metrics and key performance indicators from our 2015 results.

Great. Thanks so much indeed Paddy. We continue to focus on four main metrics at the TFG overall level. I explained in our Q3 2015 call at our Annual Investor Day that from Q3, we multiple the calculation of certain metrics to reflect the consistent approach to evaluating all elements of TFG Asset Management using fair value and for those who missed the presentation, the slides are available on our Web site as always. Primarily as a focus of our key metrics fundamentally stays the same, it's just -- they're now into their value service. We look at earnings and we measure that in two different ways, fair value return on equity and fair value earnings per share. We look at how value is being accumulated in the company by our fair value NAV per share metrics. I mean more to have value is being returned to shareholders through distributions and on a regular basis those remain in the form of dividends. Let's take each of those in a bit more detail. So, our first measure of operating performance is fair value ROE and that's fair value and net economic income divided by net assets at the start of the year. So the fair value ROE for 2015 as a whole was an annualized 14.5%, so close to the top of the range that Paddy mentioned our target range of 10% to 15%. When we spoke last year, we reported that Q3 being a pretty challenging environment for investing, so its pleasing to report that TFG ended the year pretty strongly with fair value net economic income of $35.5 million in the quarter and about $164 million for the full year. As I mentioned this equated to our fair value ROE of 14.5% for the year and that included the impact of that in the fair value of -- the parts of TFG AM representing approximately 6.3% or $115 million of net economic income, net-off fee. Standout contributors in 2015 were U.S. CLOs, Polygon's equity funds, some direct balance sheet equity investments, real estates and TFG Asset Management each of which will be covered in a bit more detail later on today's call. Turning out to our second measure of earnings and that's fair value earnings per share and we calculate this using fair value net economic income, again, but we divide this by the average U.S. GAAP shares in the period. The net economic income that I mentioned $264 million resulted in a fair value EPS of $2.72 of which $1.18 related to the move to its fair value base metrics, the TFG Asset Management. So that left the underlying earnings per share a like-for-like basis of $1.54 representing a 24% increase of the corresponding period in 2014. So a note on the moving to the U.S. GAAP shares, during the year, the weighted average GAAP shares rose by less than 2% overall to $97.1 million and its partly a result of investors taking shares in those events as part of our dividend reinvestment program. And also partly as a result of at least from escrow of certain shares relating to the acquisition of Polygon in 2012 offset to some degree by the impact of the tender offer in December 2015, moved it later. Our fair value NAV per share takes fair value NAV overall approximately $2 billion and divided by TFG's fully diluted share account at $104.2 million. So total fair value for TFG felt slightly in Q4 from $1.987 billion from just over $2 billion at the end of Q3, this equated to fair value NAV per share $90.08, which was an increase of more than $2 or 11.9% compared with the end of 2014. Quick note to remind everybody that the fair value NAV per share is also the distribution of dividends of approximately $0.64 per share during the course of 2015. Now, other than underlying performance in the quarter Q4, this metric was mainly affected by the buyback of 6 million shares in a tender offer at $10 per share while we emphasize on our Web site. While [indiscernible] with therefore reduced, the number of shares in the denominator also reduced and together these have an accretive impact of having about $0.49 per share to the fair value NAV per share metric. Now, note that substantially all of the TFG shares acquired in the tender offer are being held to hedge against the potential P&L volatility arising from future grants of shares under long-term incentive compensation awards by TFG Asset Management. There is some longstanding [unclaimed] [ph] employees although not for the principal of the manager. These awards further increase the alignment of interest of senior employees at TFGAM with TFG external shareholders. And we expect that the expense of the long-term compensation plans will be recognized through TFG's P&L and the number of shares will also be shown in the fully diluted share count over the life of plans hope they unfold which will be over the next 8 years or so. Our final metric, dividend per share is of course an important measure of how value is being returned to investors, as Paddy mentioned that we continue to pursue and follow a progressive dividend policy which targets the payout ratio of 30% to 50% of normalized earnings based on our long-term return of equity of 10% to 15%. The Q4 dividend per share was $0.165, an increase on the level declared from Q2 and Q3. On a running 12-month basis, the dividend of -- just a little under $0.65 per share represents a 4.9% increase over the prior 12-month period and equates to an annualized dividend yield of around 6.5% on the year end share price. So this brings the cumulative dividends per share declared since IPO of more than $4. And with that now, I will hand back to Paddy to discuss the competition of TFG NAV.

Thanks Phil. Yes. Now to go in some detail on the performance by asset class. First to start with a slide showing the breakdown of the portfolio and this is obviously the same as I showed earlier, but this time, it's comparing the portfolio at the end of 2015 with the end of the prior year 2014. So, I would note first, the large increase in TFG Asset Management moving from 6.5% to 21%. This is for several reasons, firstly, the acquisition of Equitix. Secondly, the growth in the business itself; thirdly, as Phil has talked about on previous calls, the fair value reporting for the totality of that business. The second thing I think what taking away from the slide is --

Ladies and gentlemen, thank you for standing by. Your speaker is just disconnected. Please standby while we reconnect.

Okay. Hi. This is Mike. We got a little audio problem on the call. But -- can you hear me? I will continue. Operator, can you hear us speaking?

Yes, we can hear you. You're live.

All right. I will continue then. This is Mike. TFG's U.S. CLO 1.0 investments continue to make a positive contribution for the company's earnings during 2015 producing $55.7 million income for the year despite a pick-up in credit market volatility particularly in energy and commodity related credits. The average remaining expected duration of this segment of the portfolio declined in 2015 due to continued post-reinvestment period structural deleveraging, actual redemptions and one asset sale driving and approximate 41% of reduction in the fair value of TFG's U.S. CLO 1.0 investments. The aggregate fair value of the U.S. CLO 1.0 portfolio is now below that of the U.S. CLO 2.0 portfolio. TFG's U.S. CLO 2.0 investments performed well in 2015 generating income of $30.2 million for the year. As for the U.S. CLO 1.0 investments, the CLO 2.0 segment saved oil and gas and commodity credit related headwinds as well as a handful of idiosyncratic defaults. The second half of the year also saw leverage loans spread wide and the average single B institutional U.S. loan spread rising by more than 26% from the lows registered earlier in the year. We believe this allowed our CLO managers to reinvest into lower prices and larger effective spreads increasing the potential arbitrage available to our CLO equity investments. Certain of our managers also focused on recalibrating the overall credit risk composition of the respective portfolio by making opportunistic sales in substitutions. TFG's European CLO investments generated positive returns on the year of [occurrence] [ph] $6 million of income. As with this U.S. CLO 1.0 portfolio, we continued to see amortization of these European CLOs and undertook certain optional redemptions reducing the U.S. dollar fair value by over 50%. The vast majority of these optional calls were finalized during the year and TFG has received the net redemption proceeds. Recently, several major investment banks have significantly lowered their projections for CLO issuance in 2016 to as low as $35 billion. To give some context, this compares with total U.S. issuance of approximately $100 billion in 2015 and $125 billion in 2014. Driving the reduction in CLO issuance has been two primary factors. The first is the effects of risk retention regulations, the theme we've been highlighting for quite some time. As we expected, fewer managers are able to access the market due to the capital required to meet the skin in the game requirements. We continue to see this as one of the major issues back in the CLO market, a CLO manager look to access or raise capital to meet regulatory requirements. The second issue impacting lower CLO issuance volumes is the market value of the secondary CLO position particularly for equity and lower mezzanine tranches. The deterioration in energy and commodity segment of the loan market has negatively impacted the valuations of CLO tranches in the secondary market. This has resulted in instances where secondary equity or lower mezzanine tranches being relatively cheap compared to new issuance, which has reduced the demand from investors for primary deals. It is interesting to note that often time's valuations for secondary positions are based on the market value coverage of a particular tranche despite the fact that these are cash flow CLOs. We believe that because of these contradictory approaches the values being computed based on market prices while structures are based on cash flow mechanics that this may have contributed to an impact where by actual trading volumes are low and bid as spreads particularly for secondary CLO equity tranches had widened out. Given this market dynamics, we are being opportunistic in the secondary CLO market and looking for value. Until the secondary CLO market finds equilibrium, we would expect new issued CLO volumes to remain subdued. With that, I'm going to hand it back to Paddy.

Thanks Mike. So moving down on this slide, equity is next. Fair value net income of $57 million during the year for 2015, which is a confirmation of good performance from one-off equity trade that we discussed during the year, as well as strong performance particularly from the predominant equity fund and particularly the European event-driven equity strategy up over 10% for the year. I know these strategies will be covered in more detail later under the TFG Asset Management section. Credit was broadly flat for the year, small-up in convertible bonds and direct loans and a small down in other distressed investments. Real estates contributed about $25 million to net income during 2015 and this was mostly from realized sales in U.S. and Japanese investments in GreenOak investment vehicles. And then, the last item here TFG Asset Management, as you can see from the slide of $185 million of fair value, net asset value and I think its Mike who'd talk a little bit more about this. Firstly, we have a slide here from the net income for the fourth quarter being approximately $20 million, and obviously, these drivers you can see for the last -- in particular its Equitix and LCM. We do want to spend a bit of time on TFG Asset Management, so we're going to do two things, firstly, Phil is going to talk about the financial detail on TFG Asset Management, and then, he is going to hand over to Steve, who will talk through some more detail on the both underlying businesses and we’ll then pass back to me. With that I’ll pass to Phil.

Thanks. So we mentioned on past call for the over time we will continue to monitor for important metrics for TFG Asset Management in the build up to the planned IPO in three to five years. And so let's have a focus on some of those important metrics. Our main drivers for future growth in the value of this part of our business will of course be the underlying operating performance and indeed EBITDA is and have been one of the most important metrics used by the independent valuation specialists when determining the fair value for TFG businesses. EBITDA equivalent for the majority-owned TFG Asset Management businesses rose by around 102% in 2015 compared to 2014 and that was accelerated in large part by the inclusion of Equitix from the start of February 2015 and Steve will cover developments and drivers performance later in the call. In past reports, we provided pro forma P&L for TFG Asset Management including all majority-owned businesses, so only excluding the GreenOak minority and trust that we hold. We continue to report fee incomes between the four categories and in particular to differentiate the recurring management fee income from success and performance fee income, of course, this is very important and maybe a little bit more volatile which was the case during the quarter of 2015. Total income grew by 58% in 2015 compared to 2014 with over 28% growth in management fees and TFG AM added material fee paying AUM, through both organic growth and the acquisition of Equitix. Underlying AUM driven management fees continued to trend upwards in Q4 -- further material new deal was closed by LCM and Equitix continue to put capital for work. Polygon's AUM, and therefore, management fees increased primarily due to performance in the quarter and the European equities fund in particular already noted by Paddy. We expect to see the growing benefits of both latest LCM deal closed in Q4 and the series of Equitix's fund foreclosures and the new TCI business in future quarters. Performance in success fees grew by approximately 174% year-on-year again significantly helped by the acquisition of Equitix. After a challenging third quarter performance TFG Asset Management finished the year very well, but particularly strong performance from both the primary and secondary businesses with Equitix from realized performance fees generated by LCM, from performance fees relating to certain old fee, hedge funds in the Polygon part of the business. Other fee income includes third-party CLO management fee income, which is generated from some CLO 1.0 arrangements some which continue to decline inline with the expected amortization of those CLO deals. In addition, includes some cost recoveries from TFG, relating to seeded Polygon funds. These seeded cost recoveries decreased slightly year-on-year over the team supporting the seeded fund continue to grow as these businesses mature and build third-party capital these cost recoveries should reduce. This particular category we also include some fee income generated by Equitix on certain management executive contracts, which is a growing part of the Equitix business. General operating expenses for TFG AM grew by approximately 30% in 2015 compared to 2014. This growth has been driven largely by the acquisition of the 60 plus Equitix team, although we've also added resources selectively to part on to the Hawke's Point investment team during 2015. We continue to see the infrastructure platform and the team running it as offering operational leverage as the business expands. And with that, I'll pass to Steve to pick up on TFG Asset Management.

Thanks Phil. As we've discussed, TFG Asset Management is designed to enhance our asset level returns by owning asset management businesses to derive income from external investors. Our asset management platform comprises multiple brands with a focus on alternative investment strategies. As of the end of the year, TFG Asset Management represents 21% of our net asset value. As this slide indicates the six underlying businesses in TFG AM manage $17 billion, employ over 200 people and have offices in London and New York. TFG Asset Management added two new businesses this past year. In February, TFG completed its acquisition of Equitix and integrated core infrastructure asset management platform. And in the fourth quarter TFG launched Tetragon Credit income partners, which is the general partner of a private equity vehicle that among other things makes investments in CLOs relating to risk retention roles. The vehicle also has the capability to invest in secondary CLOs. TFG is a core investor in the vehicle, which had its first close in November 2015 with committed capital of $143 million. TFG expects to see TCIP as its primary vehicle for access to both the primary and secondary CLO market. Turning now to the next slide, as you can see the $17 billion of AUM within TFG Asset Management is well diversified across our business units. Our largest manager by AUM is our joint venture with GreenOak with assets under management of $6.6 billion followed by our CLO manager LCM with assets of $6.1 billion. Equitix our infrastructure manager manages $2.8 billion while our hedge fund business Polygon has $1.5 billion under management. The right side of this chart demonstrates the diversification by fair value of our businesses. Equitix by fair value is our most valuable business representing $174 million, LCM represents $110 million, GreenOak $70 million and Polygon $67 million. TCIP and Hawke's Point two of our more nascent businesses today represent a small part of the total NAV over managers, but we are hopeful as we execute on their respective business plans that that value will grow. This next chart outlines the AUM growth of TFG Asset Management, there are a few key things we focus on with regards to our asset management business namely returns, profitability and profitable AUM growth. We're pleased that on this last metric profitable AUM growth, we've increased AUM considerably since we embarked on building in asset management business. In the past year TFG Asset Management's AUM grew by 54% to $17.1 billion or said it another way AUM grew by $6 billion but some of that growth was via acquisition namely the Equitix acquisition. We're pleased that the bulk of the growth came from our underlying businesses, which demonstrates their strong organic growth. I now want to dive a little deeper into the underlying TFG Asset Management businesses starting with LCM. LCM continued to perform well in 2015 despite some losses in oil and gas related investments, despite that we were pleased that LCM posted defaults of less than 0.2% of its AUM. As of the end of the year all of LCM's cash flow CLO that were still in their investment period remained in compliance with their coverage staff continuing to pay senior and subordinated management fees and to generate cash flows for their equity tranches. During 2015 the team brought three CLOs from market adding $1.7 billion in AUM while 15 of the team's CLOs experienced $844 million in amortization. Next, I'd like to highlight GreenOak, since it's founding in 2010 GreenOak continues to post impressive results each year, growing rapidly and investing well, 2015 was no different. During the year GreenOak completed its fund raise of Europe Fund-1 raising €250 million close to Asia 2 in excess of $500 million and raised assets for a variety of projects including 425 Park Avenue in the United States. As I said upfront, however, AUM growth is only metric we focus on within our asset management business. We're very much also care about return generation. And so I should point out that GreenOak managed vehicles continued to perform well across the European, U.S. and Asian businesses and particular U.S Fund-1 and Japan Fund-1 are starting to monetize significant parts of their portfolios for both funds currently expected to exceed IRR. With both funds currently expected to exceed expected IRRs. And next I would like to highlight Polygon. I'm pleased with Polygon hedge funds 2015 results. 2015 was a difficult year for hedge fund strategies, and so we were particularly pleased that all of our strategies posted strong relative performance during the year and a few of our strategies also posted strong absolute performance. Our convertible strategy was up 4.5% during the year, which compares well with the HFRX convertible index, which was down 12 basis points in the same period. And since inception this strategy is 17.1% annualized performance compared really well against the 5.1% return that is benchmark produced. Our European event driven fund was up 10.3% in 2015 versus a negative 6.9% return produced by the HFRX event driven index. And since inception in 2009, our event strategy has generated 11.2% return compared to 1.8% return for the benchmark index. With our mining strategy, we produced a 6.2% return versus the GDXJ Junior Gold Miners Index, which was down 19.7% for the same period. In this trust, we produced a negative 2.2% return, which compares well with the HFRX restructuring index which was down 11.1% for the year. We were also pleased that two of our strategies convertibles and event driven were nominated for Euro hedge awards. Turning to Slide 24, I would like to review the AUM of our Polygon strategies and our fund rising goals for them. Today, our Polygon business manages $1.25 billion in open funds. Our largest strategy is European equities with nearly $640 million under management, we think that event driven investing is a compelling allocation today for TFG and we believe that the European opportunities especially now is particularly compelling. Our next largest strategy convertibles with over $400 million is a capacity constraint strategy and the fund is not currently taking in new capital. Our other strategies are in various stages of development particularly our distress strategy. We believe that over time, this will be a compelling offering, but right now, we are not concentrating on fund raising for this fund, but rather focused on investing its current capital base of $100 million into compelling opportunities. Turning now to Equitix. Equitix manages six products at this point, Funds 1 through 4, as well as manage account in the Equitix energy efficiency fund. Funds 1 through 3 are all invested in delivering stable yields to investors. Equitix Fund 4 is in the process of fund raising. It is expected to soon reach it's fund raising target and a significant portion of its capital has either been invested or committed. The energy efficiency funds are in there investment period and are 70% committed to a diversified portfolio projects and the portfolio is cash generative. Finally, the Equitix managed account is fully invested or committed and the portfolio is cash generative. I want to lastly spend a minute on our two nascent businesses, Hawke's Point and Tetragon Credit Income Partners. We established Hawke's Point in 2014 to provide capital to companies in the mining and resource sectors. Our team has been hard at work meeting with companies in far flung regions of the world and while we have no investments to report right now, we are seeing increased opportunity is created by the distress in the metals and mining space. Lastly, I want to report on Tetragon Credit Income Partners. TCIP is focused on providing risk retention capital to CLO managers. As I mentioned, we held our first close in November $143 million and our second close last week. We will have more to report in our Q1 materials as fund raising continues to go well for this new product. I will now hand it back to Paddy.

Thanks Steve. Moving on, slide that I think everyone has seen before looking at future investment expectations. CLO equity continue over the next 12 months to -- expect to market dependent, but we marked approximately $100 million. As Steve said, we do see that TCIP is going to be the major vehicle for primary and secondary CLO equity, but the amount of investment obviously continues to remain the same. Event-driven equity and credit, we continue to believe we have -- expect to have stable allocations. Real estate, again, we expect roughly in the range of $25 million to $75 million of ongoing commitments to GreenOak funds and these are funds in the U.S., Japan, Spain and the U.K. But that funds in the U.K. and Europe amounts for different funds across the globe. However, we have continued to earmark about up to $100 million remaining finance, none of that have been invested to-date, but that continue to be the goal. And as we've said in the past, continue always to be looking for potential new asset classes and new additions to TGF Asset Management. And before you move from this slide, it probably does -- worth saying a couple of expert things on cash and cash management. I think most people are aware that currently we have no corporate level borrowing facility at Tetragon. And therefore, cash management is a complex business. We obviously need to keep cash reserves on known contingencies many of which are on the slide here, high investments, but also fees and dividends et cetera. We also like to keep cash for our unknown contingent fees and these are mainly market opportunities both good opportunities for us and obviously preserving against potential bad or negative consequences. As we've said in the past that we would like to have a revolving debt facility at the corporate level. We continue to see that and continue to negotiate that and we hope to have news in the road to the near future. Moving on to our penultimate slide, that's again is one that people maybe familiar with -- from the third quarter. As shown in the graph, is the five in the circle is the amount of the business and the business is here although that have a listing on London SFM and which is the specialist funds market, so that is the new listing that Tetragon achieved in the fourth quarter. On the x-axis is the price of book of the company, the y-axis is the current yield and the purpose of this is to show that against that universe at Tetragon is large, it has the meaningful dividend and it's certainly cheap on a price of book metric. We have been trading on SFM since November. And the question that I'm going to answer in a moment about volume but it's important to note that even though we didn't have an issuance on SFM and there are no shares initially that will trading. So it will take a long term view to create the liquidity on the SFM, but we have a lot of hope that this will happen over time. And so if I can just move to the last slide, few initiatives that we've talked about but to continue to keep you updated. Obviously, the SFM investing itself 9, November and in conjunction with that a point achieved from the brokers, Stifel and Cantor to work with us both here in Europe but also in the U.S. We have the Investor Day positive feedback, and obviously, it gives us a chance to say a lot about the company and go down in some detail and have that available on the web. We have been out meeting new and existing and potential investors. We have done road show in London, Edinburgh, Amsterdam and we have plan to be in the U.S. as well. And the dividend continues to be an important -- particularly in a low yield environment but as we said in the past and we said again on this call, the intension is for progressive dividend and the current yield obviously over 7% on the current share price. We have talked a bit in the past and continue to reflect on our potential for the IPO of TFG Asset Management business and could have caused -- create a lot of value for shareholder as well. And I think those people that have been following the company closely obviously know that Steve Prince joined us in the fourth quarter last year and took on the Investor Day and obviously you've heard him talk today and we think he will -- help accelerate the growth of the business. And lastly, we continue to focus on alignment of interest approximately 19%, 19 that's 19% of TFG public shares are owned by employees of TFG AM and/or principals of TFM the manager. A - Paddy Dear: With that, I would like to move on questions that completes the set of full part of the presentation. But we do have quite a few questions. And so I'm going to get stuck into both. But, first, it says -- management get performance fees for the change in fair value of TFG Asset Management and the answer to that is no, but specifically TFG pays management and performance fees on the basis of the U.S. GAAP reported NAV. As far as the fair value NAV performance metrics which obviously includes the fair value of LCM and Polygon, but not to drive either the management or performance fees. Next question here is on the dividend, it says please comment on the rate of dividend growth of 4.9% for the year, which seems a bit low than expectations given the five year compound annual growth rate of 13%? Phil, you want to take that question?

Thanks Paddy. I guess the focus here was on the maintenance of two things, one aggressive trends of the dividends which we've continued. And two staying within that target range of at least 50% of normalized earnings, which again, we have managed to do. Clearly, over time the dividend is growing, so each increment is being compared with a high-base. We have maintained typically an extra $0.25 or so and sometimes sorry $0.025 or $0.05 growth over the last couple of years and the pattern has continued as well, every couple of quarters we've increased the dividend and we expect to continue that going forward. So, we don't target a particular annual growth, but we do target progressive and a dividend within the earnings payout range that we discussed.

Thanks Phil. Next one I have here is on CLO, so probably that's for Mike, and the two or three questions that we've had over the last couple of months on this. But, I would read one out here, do you have an update on the underlying CLO exposure by industry particularly first in oil and gas as you might have imagined and geography Canada and Southwest U.S. in particular. So Mike, you want to tackle that one?

Yes, sure. So we believe that the portfolio is very well diversified across many different industries, but specifically, the current oil and gas exposure is approximately 2.5%. And now with respect to geographic diversification at the end of the year 90.3% of the CLOs were U.S. CLOs and 9.7% were European CLOs.

Thanks Mike. This next one is on, help you read it, what has enabled your CLO portfolio to perform so well in January, but the NAV has remained flat, is there anything to be read into this from how you mark them, mark the model for the equity tranches? I think Phil probably.

Sure. Okay. So remember definitive aspects here, I'm looking forward to start, but if you've seen on today's and indeed over the last few quarters, TFG is holding an increasingly diversified portfolio. So the CLO story isn't driving all the performances based CLOs, as a reminder approximately one-third of the total fair value of the portfolio. Mike also just mentioned that within the second quarter there we have a pretty diversified array of business as well which is helpful. We've almost covered it I think that we have generally outperformed the market particularly in defaults. So the marked model perhaps a couple of questions or a couple of comments on the model of equity tranches, we have a consistent technology for marking the part, which we've continued to quite last 10 years or so. As you mentioned very, very recently audited by our auditors of KPMG. And there we're looking to focus on observable data the inputs to that modeling purpose, which we continue to do. And because as one of the main kind of forward metrics, and then, important one the forward curve, we've managed to look to both what is happening in TFG's own portfolio, so some lucky historic performance what's happening in TFG portfolio compared to the market. And also, what market is telling us about the likely trend in forward, the forward curve, the default and there we'll reach out to the credit agencies. And that forward view is actually lower than their long-term averages. So you'll recall I'm sure people were familiar with the modeling process. We have kind of long-term default level that we use based on the cash flow portfolio. And we are currently apply any one times multiple to that and currently we have significant headroom between the results and the fund reception and our experience.

Next one here, could you provide some color on the cash from the balance sheet, but this cash already committed to future CLO content also in-light of regulation of quality to retain a part of the CLO tranche as it originate. Could you also discuss the rationale between choosing to retain the risk as far as for the CLO tranches or the equity problem retaining a fraction across all the [indiscernible] of the CLO issuance? I think that the main focus there is on the risk retention changes. So Mike, you want to tackle that?

Yes, sure. Yes. So you already mentioned the $100 million for future CLOs. I think the second part of the question to summarize, you're asking why we chose to meet risk retention requirements via the horizontal option where about we invest in the majority of the equity tranche versus the vertical option where we would need to invest in 5% of each cost the AAA, the AA, the BBB, the BB tranche and the equity tranche. We feel that the risk adjusted returns of investing in the majority of the equity tranche outweigh the return profile of the vertical option further more it's been our strategy since the company's inception to take majority control on positions in COL equity and we believe that we delivered superior returns based on this strategy.

Thanks Mike. And another one here on CLO, so I think that -- Mike, this can be you as well. Can you please discuss to what extend you'd be able to access additional liquidity if needed by liquidating CLO 1.0 and/or 2.0 position?

Yes, sure. Having a control majority position in our CLO equity investments provides us with several options that we needed to raise cash. We can continue to receive a regularly projected cash flows. We can [Audio Gap] transactions and therefore, we'd accelerate the remaining cash flows for a deal, or we can choose the sales position in the secondary market and on an ongoing basis we evaluate into these options.

It's just probably worth adding that, actually that there is room for probably make out less flexible with regard to the cash management in the regulator required for the maturity. I think of the years that this will change. We've had several questions, we've had over the last few weeks about share buy back, so rather read any out of my pen drive, from advocating that TFG uses all its free cash to buy back shares from advocating just that we do a little more than we have. Some are saying that, we shouldn't do any buyback and some are saying that we should only do them but at higher prices. Some are saying that we should have a permanent buyback in place of a fixed discount to NAV. I'm suffice to say there are many different suggestions they continue to all be welcome, but I thought rather than read out individual ones, I thought I'd summarize it like that and may be then tackle the subject head-on. I think people have heard before that we believe the long-term growth and the success of the business as a whole is about making good investments and building a valuable asset management business or businesses and thus creating, wearing and compounding enterprise value for shareholders. We do believe that buying back shares obviously can be good for now for share growth and in particularly obviously the wider the discount the more attractive that is potentially. And indeed Tetragon completed a share repurchase in December of $60 million. And to put that into context since inception Tetragon bought back approximately 35% of the shares been issued and it's about $385 million. Notwithstanding that the evidence from our company and indeed many others is that buyback do not necessarily increase the share price and can obviously have an unintended consequence or reducing liquidity and obviously concentrating rather than diversifying the assets of the business. So, at any point in time, we always consider and I talk about cash on this call already. We consider the pros and cons of looking at a repurchase rather than other particular uses of cash. And we talked about the other potential uses of cash we have. And we believe share buyback should be advantageous but that's certainly not the universal kind of fear from discounts in that. Okay. A question on the manager options, there are 12.5 -- the question is as follows; there were $12.5 million options exercisable at $10 a share and that's set as far in April 2017. These were issued at the time of IPO. A) These options have cash effective features? B) Can you disclose who specifically hold these options; and C) What potentially overall ownership in Tetragon for these options represent to their holders. And Phil, I'm going to pass to you for that one.

So, thanks. Okay. So first one to the options of cash exercise, these options can and are said to be net support in TFG shares. And of course they're currently out of the money. In terms of who they've issued to Technical and Financial Management LP, which is the investment manager of TFG more details on the Web site, but the manager was the recipient of the options. And in terms of overall ownership in Tetragon for these options represent for their oldest -- well, the options are counting off the money, so they're not included in any share option metrics that we report and so that's -- they represent currently.

Thank you. And another one, which is here on share count -- I believe that's for you as well, Phil. But, let me read it out. Share reduced from $125 million so $98 million at December 2013, yet, today after several of those tenders, the share count appears to have increased slightly part of the dynamics that makes this happen? And perhaps as a related question when investors take their dividend in-store, how is the price calculated for the number of shares they will receive? So Phil, go ahead.

Great question in the order. So -- if you look at the commercial highlights table in the annual repot in each of our quarterly you will see that we have two different share counts. One is a U.S. GAAP share count and the other one is a fully diluted pro forma reduced share count. And in light of that we have the focus on because that takes into account any potential dilution impact of things like options and things of that nature. So, it's just is that, I'm going to kind of point you to Prince, you alluded to 2013, but the fully diluted share count has fallen from about $111 million at the end of the first quarter 2013 -- 2013 to $104.2 million at the end of 2015. So that's a 6% deduction. So the slightest of change for this metric largely saying for the U.S. GAAP as well over the last five years have been firstly some increases as shareholders have elected to take shares into dividends and certainly this has been in 20% to 25% range over the last couple of years yet kind of broad rule of thumb. Secondly, if you see, reductions as result of periodic buybacks as Prince already mentioned by tweaking to one thing the buyback of 6 million shares at the end of 2015. And some time for us to see the impact of the options we've already mentioned -- major options, to the extent they need money although beyond 2015 so they can have an impact. So the second question relates to the calculation of the number of shares that was received if they elect to take that dividend in stock. And reference, the details of the program [indiscernible] can be found under the investor section of our Web site. In brief, safely declare the dividends each quarter unless we've already covered on the call, the Q4 was $0.65 per share -- share reckons prices and these have been for the -- and that's to be based on five working days trading, if you wipe-off of the five working days and for the Q4 dividend, the reckoned price was derived between the 29 of February and 4 of March and came to $8.64. So in terms of getting a reference -- kind of reference, conventional factor, we divide the number of shares receivable by dividing the dividend per share by joined reference price and it includes conversion rates so which basically says, this is a number of different rights you need to hold in order to receive a newly achieved share at the Q4 that was a little over 52.

Thank you, Phil. I just got one more question, it's for the [indiscernible] or maybe quite the wrong one, I will read one question on the topic, which reads as follows; it does not appear that the listing in London has resulted in much more trading liquidity for the stock although it did help in getting the company and analyst covering it. What is your capital market strategy to feature investors, e.g., road show, conferences, presentations et cetera. And I think this also incorporates another couple of questions, which if I paraphrase, what do we believe is the most important factor and narrowing the discount. So maybe just I reaffirming with the SFM listing, we weren't issuing any stock. We did do a non-deal road show in London, Edinburgh and Amsterdam and we plan New York, Boston and others in the coming weeks and months. I also highlighted that significant volumes are being traded off market maybe as high as 70% and as the buyers are trading in blocks and so not on exchange. And of course, a lot of this is a function of the fact that many of the shares are traded in the U.S. What we do think is, this is natural to expect volumes to increase in London over time, that's probably not going to shift all at once. There is [precedence] [ph] from other companies that have had a Euronext and added SFM listing and volume has migrated or be it over several months and years to the U.K. So it's good precedence for that. But we need to work further on that we need to have more brokers making markets in London, I mean certainly three companies [indiscernible] and volume will get volume, it's a long-term project and we are very much committed to that. With regard to the non-deal road shows, not only do we plan to continue those, but we also plan to where possible speaking at conferences particularly at the phase of asset management businesses and alternative asset manager. I think the largest single effect on the discount that we can have is getting out to reach out to a broader audience. Its knowledge of what we do. It is when and what we do and as a lot of people have pointed out it is independent research on what we do. And so that it continues to be an area of major focus for the company and for the management.

And with that, I think we just run over the hour. I'm going to wrap it up there. But, I thank you very much for staying with us. And we look forward to speaking to you again in coming quarters.

Ladies and gentlemen, thank you for your participation. You may now disconnect your lines. Thank you.