Tetragon Financial Group Limited (TFG): Performance Report for Period Ended 30 September 2009

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

In this quarterly update, unless otherwise stated, we report on the consolidated business incorporating TFG and Tetragon Financial Group Master Fund Limited.(1) References to “we” are to Polygon Credit Management LP, TFG’s investment manager.

Portfolio and Market Developments - Executive Summary and Outlook:

- Financial Overview: The third quarter of 2009 saw a return to profitability, driven in part by improvements in the O/C cushions of certain U.S. portfolio deals. The quarter witnessed positive earnings as well as an increase in the Accelerated Loss Reserves due to the restoration of certain previously released amounts. Improved portfolio performance also saw cash receipts from investments increase quarter- on-quarter, pushing cash balances higher. - Collateral Performance: The third quarter was characterized by a notable improvement in secondary loan prices as the U.S. high yield capital markets and fundamental credit conditions showed signs of continued stabilization. - Key Drivers of Collateral Performance: Although defaults continued at a material level during the third quarter, annualized quarterly and monthly default rates declined significantly from the highs reached during Q1 2009. Similarly, the pace of U.S. CCC downgrades decelerated during the quarter. As a result, while total CCC and defaulted asset holdings of many CLOs remained high, the net increases in such holdings were largely offset by market value and/or trading gains driving improvements in U.S. CLO O/C levels, on an aggregate basis. European CLOs, however, generally continued to see O/C deterioration due to, among other factors, continuing realized and unrealized losses and certain transaction-specific haircut requirements. - CLO Market Developments: Secondary CLO prices posted strong gains as underlying loan prices rallied during the quarter and signs of fundamental stabilization emerged. Global arbitrage cash flow CLO issuance, however, remained subdued with new transactions dominated by balance sheet securitizations and restructurings of older-vintage CLOs. - Outlook: We expect that the remainder of 2009 may present challenges to the continued improvement of TFG’s portfolio as additional downgrades and defaults, among other factors, may exert negative pressures on TFG’s investments.

As we assess potential uses of our cash, we intend to continue to evaluate new secondary CLO debt or equity investments, both as add-ons to existing portfolio positions or in new transactions which meet our investment criteria. Additionally, we continue to explore strategic opportunities in the leveraged loan asset management space as a means of potentially diversifying TFG’s revenue base and benefitting from the anticipated recovery in the credit markets.

Q3 2009 Financial Results at a Glance:

- Net Income: Q3 2009 saw a consolidated net profit of $31.2 million, compared to a loss of $(26.7) million in Q2 2009 and a profit of $48.8 million in the corresponding quarter in 2008. - Cash Receipts: The investment portfolio generated $35.3 million of cash during Q3 2009, or approximately $0.28 per share (calculated using the average number of shares outstanding in TFGMF during the period based on quarter-end holdings). This compares to $31.9 million of cash generated during Q2 2009. - Earnings per Share: EPS for Q3 2009 was approximately $0.25 per share resulting in a consolidated EPS of approximately $(3.25) for the first three quarters of 2009, compared to a positive EPS of $1.11 in the same period of 2008. - Net Assets and NAV per Share: Consolidated net assets were $720.8 million, or $5.71per share, as of September 30, 2009, up from $693.1 million as of June 30, 2009, or $5.50 per share. - Cash Balance: Cash holdings increased during Q3 to $149.7 million at September 30, 2009, or approximately $1.19 per outstanding share, compared to $123.8 million at the end of Q2 2009. TFG continued to have no outstanding borrowings. - Dividend: On October 21, 2009, the Board of TFG declared a dividend of $0.03 per share in respect of Q3 2009, which will be payable on November 18, 2009. Please refer to the website (www.tetragoninv.com) for additional information regarding the dividend, including the Optional Stock Dividend Plan. - IRRs: The weighted-average IRR ended the quarter at 10.3%, up from 9.2% at the end of Q2 2009. This reflected, among other factors, improvements in the prices of distressed, excess CCCs and defaulted assets, which in certain investments outweighed the negative effect of continued increases in the amount of such assets on O/C cushions. - Life-to-Date Net Loss Reserves: (2) Excess loss reserves increased in Q3 2009, with approximately $95.4 million of excess loss reserves having been factored into our IRR calculations as of September 30, 2009. At the end of Q2 2009, excess loss reserves were approximately $38.9 million. - Accelerated Loss Reserve: (3) As of the end of Q3 2009, the Accelerated Loss Reserve totaled $333.8 million, compared to $254.1 million at the end of the prior quarter. - Hurdle Rate: The hurdle rate for Q4 2009 incentive fee has been reset at 2.9329% (Q3: 3.2354%) as per the process outlined in TFG’s 2008 Audited Financial Statements and in accordance with TFG’s Investment management agreement.(4) No incentive fee was paid for Q1, Q2, or Q3 2009.

Portfolio Detail:

- Portfolio Size: As of the end of Q3 2009, the estimated fair value of the investment portfolio totaled $567.4 million, with look- through exposure to over $17.0 billion of leveraged loans. No new collateralized loan obligation (”CLO”) investments were made during the quarter. - Portfolio Composition: The portfolio currently consists of 61 CLO investments managed by 32 CLO managers.(5) - Collateral Performance: As of the end of Q3 2009, 24 or approximately 40.0% of our CLO investments were failing their most junior O/C test,(6) a decrease from 25 investments or 41.7% at the end of Q2. As O/C tests are breached, CLO structures may divert excess interest cash flows away from the equity tranche holders, such as TFG, to pay down the CLO’s debt thereby curing the O/C breach via deleveraging. Accordingly, the aforementioned 24 investments have ceased to generate cash flows to TFG or are expected to cease generating cash flows on the next applicable payment date. Once enough debt has been repaid to cure the O/C test breach, however, distributions of excess interest cash flows to equity tranche holders could resume to the extent not precluded due to the investments’ realized or unrealized losses. - Portfolio Credit Quality: As of September 30, 2009, the weighted-average percentage of corporate obligors rated Caa1/CCC+ or below in our 61 CLO investments was 12.6% compared to an approximate 7.8% weighted-average maximum level permitted under the terms of our investments.([7]) The weighted-average WARF stood at approximately 2,813. Each of these foregoing statistics represents a weighted-average summary of all of our 61 investments.([8]) Each individual investment’s metrics will differ from this average and vary across the portfolio. TFG Investment Weighted- Average Summary Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 Caa1/CCC+ or Below Obligors: 12.6% 11.6% 11.4% 7.6% 4.9% 4.4% 3.4% WARF: 2,813 2,800 2,758 2,577 2,490 2,472 2,443

Market Detail:

- TFG and Market Default Rate: The lagging 12-month U.S. institutional loan default rate increased to 9.75% by principal amount as of September 30, 2009, according to S&P/LCD, up from approximately 9.15% during the prior quarter. ([9]) Although this rolling 12-month average default rate remains high, we believe a quarterly view may point to a turn-around in the pace of defaults (by par amount). For example, the annualized Q3 2009 default rate fell to 4.76% by principal amount from 8.7% in the second quarter and from a high of 19.5% during Q1 2009. (9) Furthermore, September 2009 was the slowest month for loan defaults since November 2008. (9) We believe that this deceleration in the notional amount of defaults may be partially attributable to the relative scarcity of large defaults, as the default rate by number of loans declined at a slower pace - to 8.0% in Q3 2009 from 9.3% in the second quarter. (9) TFG’s lagging 12-month corporate loan default rate increased to 6.7% during the third quarter.([10]) Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008 TFG Trailing 12-Month Default Rate: 6.7% 5.1% 4.0% 2.5% 1.5% 1.3% 0.8% - Secondary loan market rally: September marked the end of a strong third quarter for leveraged loans in the U.S., as the S&P/LSTA Leveraged Loan Index gained 46.1% YTD. ([11]) Distressed and lower-rated credits gained the most during the rally with CCC-rated credits returning 76% YTD, as compared with 55% for B-rated loans and 34% for BB-rated credits.([12]) We believe that this positive momentum was attributable to both technical and fundamental factors. From a technical perspective, the secondary loan market benefitted from a pick-up in prepayments financed largely via high yield bond issuance. During Q3 2009, $12.7 billion of such bond-for-loan take outs were issued totaling approximately 73% of the $17.5 billion notional repaid during the quarter. ([13]) This repayment volume outpaced institutional new issuance, which totaled only $7.8 billion during the quarter, reducing the size of the institutional loan market by 2.5% during Q3 2009 and 7.0% YTD, the biggest decline on record according to S&P. ([14]) - U.S. fundamentals and credit quality stabilize; European recovery lags U.S.: We believe that U.S. fundamental conditions also began to reveal signs of stabilization during Q3 2009 providing further support for the increase in loan prices. The operating results of certain leveraged loan borrowers registered modest improvements in earnings and revenue trends. S&P reported that of the 100 largest S&P/LSTA Index issuers, of which approximately 50% reported Q2 2009 results as of the date of the article, average EBITDA was up 9.6% and revenues increased by 4.9% sequentially vs. Q1 2009. ([15]) Although these results are promising, year-over-year revenue trends are still generally negative and financial performance continues to vary across industries and issuers. Furthermore, cost-cutting and rationalization measures may have run their course and we believe that continued top-line growth will likely require meaningful macro-economic recovery.

The European loan market, however, remained strained during Q3 2009. Although the S&P European Leveraged Loan Index posted a 35.0% gain for the year, a weak primary market, as well as continuing downgrades and defaults continued to weigh on the space. ([16]) European new issue loan volume totaled only EUR1.5 billion during Q3 2009, ([17]) down from EUR9.6 billion issued during Q2 (dominated by the EUR8.9 billion Heidelberg Cement pro-rata loan) and up slightly from EUR1.2 billion in the first quarter. ([18]) The market also continued to work through a series of restructurings and amendments, which proved more challenging to resolve than many similar situations in the U.S. due to limited liquidity and unique European legal as well as institutional loan market dynamics. As many European borrowers continue to see earnings contraction we expect that European credit recovery is likely to continue to trail the U.S.

- Balance sheet restructurings continue: The third quarter continued to see amendment, distressed exchange, and below-par buy-back activity, albeit at a slower pace than in prior quarters. During Q3 2009, only 30 borrowers sought covenant relief vs. 58 in the second quarter. ([19]) Companies also responded to the contraction in the capital markets by increasing their cash balances by an average of 22% year-over-year to increase in liquidity. ([20]) Additionally, leveraged loan borrowers were also able to extinguish or extend approximately $20 billion of pre-2009 maturities during Q3 2009, bringing the YTD total to $124 billion. ([21]) - Loan and high yield bond issuance volumes increase, providing much needed liquidity: Q3 2009 saw a pick-up in the new issuance volumes of both loans and high yield bonds. U.S. institutional loan issuance totaled $7.8 billion during the third quarter vs. $6.2 billion in the prior quarter, bringing the YTD total to $19.1 billion. ([22]) Furthermore, Q3 2009 issuance shifted away from rescue loans and DIPs toward transactions motivated by general corporate purposes. As a result institutional loans accounted for 54% of Q3 2009 new issue volume, excluding DIPs, as compared with 28% during 1H 2009. ([23]) Additionally, the end of the third quarter saw the re-emergence of M&A-driven institutional loan issuance, which market participants expect to continue in 2010, capital market conditions permitting. Q3 2009 high yield bond issuance exceeded new issue loan volumes, totaling approximately $12.7 billion during the quarter and $41.2 billion YTD, $23.6 billion or 57% of which was used to refinance loans. ([24]) - U.S. CLO O/C ratios improve while European CLOs continue to face O/C pressures: The third quarter of 2009 witnessed a general improvement in the level of U.S. CLO O/C coverage levels. These gains were the result of a combination of factors, including a moderation of default rates and CCC downgrades, broad increases in loan prices (with material gains in CCC-rated credits), waterfall-prescribed reinvestment and/or de-leveraging, as well as manager trading strategies designed to improve O/C cushions. Based on a surveillance universe consisting of 485 USD-denominated CLOs issued during 2000-2008, Morgan Stanley estimated that 247 or approximately 51% were failing their junior O/C test as of trustee reports available at the end of September 2009 ([25]) as compared with 280 out of 521 or approximately 54% at the end of Q2 2009. ([26]) Unfortunately, European CLOs continued to see O/C deterioration during the quarter. - Secondary CLO debt prices increase: Paralleling the pick-up in underlying loan prices, stabilizing fundamentals, as well as the broader credit market recovery, CLO prices increased at the end of the third quarter with mezzanine tranches posting the biggest relative gains. Although structural, collateral quality and documentation characteristics, among other factors, continue to generate price differences across individual CLO tranches, generic CLO spreads are currently at their tightest levels since the collapse of the credit markets. Despite these gains, however, CLO debt continues to offer a lower-cost alternative to accessing leveraged loan exposure and may therefore represent an interesting investment opportunity for certain investors. ([27]) - CLO issuance volumes remain subdued: Global CLO issuance remained subdued in Q3 2009, totaling $28.5 billion and bringing the YTD total to $124.5 billion. ([28]) As in prior quarters, new issuance continued to be driven by European balance sheet and Small and Medium Enterprise (”SME”) CLOs.

Share Repurchase Program

As noted in the Share Repurchase Program press release of today, TFG will continue with its share repurchase program on the same material terms as currently in effect with the exception of the program’s daily trading volume limitation, which will be increased substantially. TFG’s maximum daily trading volume for such purchases under the updated program will be based on the average daily volume traded in September 2009 compared with March 2009 under the current version of the program. The Board of TFG continues to be confident in the long-term prospects of TFG. The Board also believes that the purchase of shares in the market may at appropriate price levels below Net Asset Value represent an attractive use of TFG’s excess cash and an efficient means to return cash to its shareholders.

Quarterly Investor Call

We will host a conference call for investors on October 23, 2009 at 15:00 BST/16:00 CET/10:00 EDT to discuss Q3 2009 results and to provide a company update.

The conference call may be accessed by dialing +44(0)20-7162-0025 and +1-334-323-6201 (a passcode is not required). Participants may also register for the conference call in advance by going to: https://eventreg1.conferencing.com/webportal3/reg.html?Acc=084793&Conf=16843 3 or by going to the TFG website, www.tetragoninv.com.

A replay of the call will be available for 30 days by dialing +44(0)20-7031-4064 and +1-954-334-0342, access code 846047 and as an MP3 recording on the TFG website.

Expected Upcoming Events Date Q3 Record Date October 27, 2009 October 2009 Monthly Report November 17, 2009 (approx) Q3 Dividend Payment Date November 18, 2009

This Performance Report constitutes TFG’s interim management statement as required pursuant to Section 5:25e of the Netherlands Financial Markets Supervision Act (Wet op het financieel toezicht, “FMSA”). Pursuant to Section 5:25e and 5:25m of the FMSA, this report is made public by means of a press release and has been filed with the Netherlands Authority for the Financial Markets (Autoriteit Financiele Marketen) and also made available to the public by way of publication on the TFG website (www.tetragoninv.com).

An investment in TFG involves substantial risks. Please refer to TFG’s website at www.tetragoninv.com for a description of the risks and uncertainties pertaining to an investment in TFG.

(1) TFG invests substantially all its capital through a master fund, Tetragon Financial Group Master Fund Limited (”TFGMF”), in which it holds 100% of the issued shares. Tetragon Financial Group LP (TFGLP), a U.S. “feeder fund”, has previously held an interest in TFGMF and accordingly, received a pro-rata allocation of the performance of TFGMF.

([2]) The life-to-date net loss reserve is transaction-specific. It is calculated by subtracting the actual collateral loss for each transaction from the expected collateral loss, where the expected loss is a function of expected collateral size, TFG’s loss assumptions and the length of time the investment has been held.

([3]) The Accelerated Loss Reserve, like the life-to-date net loss reserve, is transaction specific. Whereas the life-to-date net loss reserve is an adjustment embedded in TFG’s modeling assumptions, the Accelerated Loss Reserve is a direct adjustment to the fair value of an investment to account for the potential impact of certain losses and the cumulative value of such adjustments will be and is evidenced in TFG’s financial statements.

([4]) The hurdle rate is reset each quarter using 3M USD LIBOR plus a spread of 2.647858% in accordance with TFG’s investment management agreement. Please see the TFG website, www.tetragoninv.com, for more details.

([5]) Excludes CDO-squared and ABS CDO transactions which were written off in October 2007. TFG continues to hold the economic rights to four of these written-off transactions.

([6]) Based on the most recent trustee reports available for our investments as of September 30, 2009.

([7]) Excess Caa/CCC+ or below rated assets above the transaction specific permitted maximum holding levels are generally haircut in our transactions at market value for purposes of the over-collateralization and/or interest reinvestment test ratios.

([8]) Weighted by the original USD cost of each investment.

([9]) Source: S&P / LSTA Leveraged Commentary and Data,” Loan defaults hit record 9.75%; outlook continues to brighten,” October 1, 2009.

([10]) Please note that the calculation of TFG’s lagging 12-month corporate loan default rate does not include certain underlying investment collateral that due to, among other things, the occurrence of an applicable issuer debt repurchase or exchange was assigned a “Selective Default” rating by one or more of the applicable rating agencies. Such Selected Defaults are included the S&P/LCD lagging 12-month U.S. institutional loan default rate discussed above. Furthermore, TFG’s investment portfolio includes approximately 15.6% CLOs with primary exposure to European broadly syndicated senior secured loans and such loans are included in the calculation of TFG’s corporate default rate.

([11]) Source: S&P / LSTA Leveraged Commentary and Data,” Behind Sept. loan returns (3.20%) Index hits new high of 1807,” October 1, 2009.

([12]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009.”

([13]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009.”

([14]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009.”

([15]) Source: S&P / LSTA Leveraged Commentary and Data,” Loan defaults hit record 9.75%; outlook continues to brighten,” October 1, 2009.

([16]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009.”

([17]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009.”

([18]) Source: S&P / LSTA Leveraged Commentary and Data, “(EUR) 1H09 primary volume sporadic; maturity management in focus,” July 10, 2009.

([19]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009.”

([20]) Source: Morgan Stanley High Yield Strategy Research, “Back to School High Yield Outlook,” September 2009.

([21]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009.”

([22]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009.”

([23]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009.”

([24]) Source: S&P / LCD Quarterly Review, “Third Quarter 2009,” M&A transactions e.g.: Warner Chilcott ($1.5 billion) and Skype ($600 million).

([25]) Source: Morgan Stanley CDO Market Update, October 3, 2009.

([26]) Source: Morgan Stanley CDO Market Update, July 10, 2009.

([27]) Source: Morgan Stanley CDO Market Insights, “Revisiting CLO Value Proposition,” September 18, 2009.

([28]) Source: JP Morgan Global CDO Weekly Snapshot, October 5, 2009.

Tetragon Financial Group Limited (TFG) PERFORMANCE REPORT FOR PERIOD ENDED 30 September 2009 TETRAGON FINANCIAL GROUP Financial Highlights Q3 2009 Q2 2009 Q1 2009 Q4 2008 Net income ($MM) $31.2 ($26.7) ($414.3) ($187.1) EPS ($) $0.25 ($0.21) ($3.29) ($1.48) Cash receipts ($MM) $35.3 $31.9 $47.1 $75.3 Cash receipts per share ($) $0.28 $0.25 $0.37 $0.60 Net cash balance ($MM) $149.7 $123.8 $94.3 $59.9 Net assets ($MM) $721 $693 $723 $1,142 Number of shares outstanding (million) 126.2 125.9 125.7 126.0 NAV per share ($) $5.71 $5.50 $5.75 $9.06 DPS ($) $0.03 $0.03 $0.03 $0.03 Weighted average IRR on completed transactions (%) 10.3% 9.2% 10.6% 13.8% Number of investments (1) 61 61 61 61 Net excess life-to-date loss accruals ($MM) (2) ($95.0) ($39.0) ($50.0) ($115.0) Accelerated loss reserve ($MM) ($333.8) ($254.1) ($315.0) ($141.0) Q3 2008 Q2 2008 Q1 2008 Q4 2007 Net income ($MM) $48.8 $45.8 $45.9 ($13.8) EPS ($) $0.39 $0.36 $0.36 ($0.11) Cash receipts ($MM) $77.7 $118.0 $74.0 $76.3 Cash receipts per share ($) $0.62 $0.94 $0.59 $0.61 Net cash balance ($MM) $13.4 ($69.4) ($152.9) ($186.0) Net assets ($MM) $1,348 $1,319 $1,289 $1,264 Number of shares outstanding (million) 126.2 126.3 125.7 126.1 NAV per share ($) $10.69 $10.44 $10.25 $10.02 DPS ($) $0.15 $0.15 $0.15 $0.15 Weighted average IRR on completed transactions (%) 16.9% 16.6% 16.0% 16.6% Number of investments (1) 61 61 61 61 Net excess life-to-date loss accruals ($MM) (2) ($158.0) ($137.0) ($116.0) ($106.0) Accelerated loss reserve ($MM) $0.0 $0.0 $0.0 $0.0

(1) Excludes CDO-squared and ABS CDO transactions written off in October 2007. TFG continues to hold the economic rights to 4 of these written-off transactions.

(2) Net excess life-to-date loss accrual is deal specific. It subtracts the actual collateral loss from the expected loss, where the expected loss is a function of expected collateral size, TFG’s loss assumption and length of time the investment has been held.

Tetragon Financial Group Limited (TFG) PERFORMANCE REPORT FOR PERIOD ENDED 30 september 2009 Consolidated Performance Statement of Operations Q3 2009 Q2 2009 Q1 2009 Q4 2008 ($MM) ($MM) ($MM) ($MM) Interest Income from Investments 39.6 49.6 47.6 53.1 Interest Income from Cash 0.0 0.0 0.1 0.1 Other Income 0.3 0.2 0.5 0.0 Investment Income 39.9 49.8 48.2 53.2 Management Fees (2.6) (2.7) (4.2) (5.0) Admin/ Custody and Other Fees (0.5) (0.5) (0.6) (1.0) Interest Expense - - (0.6) (1.3) Total Operating Expenses Excluding Performance Fee (3.1) (3.2) (5.4) (7.3) Net Investment Income 36.8 46.6 42.8 45.9 Realised and Unrealised Gains/(Losses) From Hedging (2.1) (2.1) 0.1 2.0 Net Increase/(Decrease) in Unrealised Appreciation/( Depreciation) in Investments (3.5) (71.2) (457.2) (235.0) Net Realised and Unrealised Gains /(Losses) from Investments and FX (5.6) (73.3) (457.1) (233.0) Net Increase/(Decrease) in Net Assets From Operation Before Performance Fees 31.2 (26.7) (414.3) (187.1) Performance Fees 0.0 0.0 0.0 0.0 Net Increase/(Decrease) in Net Assets from Operations 31.2 (26.7) (414.3) (187.1) Tetragon Financial Group Limited (TFG) PERFORMANCE REPORT FOR PERIOD ENDED 30 september 2009 TETRAGON FINANCIAL GROUP Unaudited Balance Sheet as at 30 September 2009 TFG TFG TFG Master Total Fund ($MM) ($MM) ($MM) Assets Investments in securities, at fair value 567.4 567.4 Cash and cash equivalents 149.7 149.7 Amounts due from brokers 6.7 6.7 Other receivables 0.2 0.2 Total Assets 724.0 0.0 724.0 Liabilities Unrealised loss on forward contracts 2.8 2.8 Other payables and accrued expenses 0.3 0.3 Total Liabilities 3.2 0.0 3.2 Net Assets 720.8 0.0 720.8 Tetragon Financial Group Limited (TFG) Portfolio Composition Portfolio Held by Tetragon Financial Group Master Fund Limited (unless otherwise stated) As of September 30, 2009 Report Date TFG Share TFG group TFG No. of Price ($) Market group Closed CLO Cap Net Transactions ($MM)(1) Assets ($MM) 30 September $1.90 $246.5 $720.8 61(2) 2009 Capital Allocation by Asset Class Risk Investment Investment Overall Capital - Fair - Leverage(5) Allocation Value Amortized ($MM)(3) Cost B/Fwd ($MM)(4) Broadly Syndicated Senior Secured Loans: US 61.2% $347.3 $674.2 Broadly Syndicated Senior Secured Loans: Europe 15.6% $88.5 $208.4 Middle Market Senior Secured Loans: US 23.2% $131.6 $170.1 CDOs Squared: US 0.0% $0.0 $0.0 ABS and Structured Finance: US 0.0% $0.0 $0.0 Total 100.0% $567.4 $1,052.8 0.79 Geographic Allocation by Asset Class USA Europe Asia Total Pacific Broadly Syndicated Senior Secured Loans 79.7% 20.3% 0.0% 100.0% Middle Market Senior Secured Loans 100.0% 0.0% 0.0% 100.0% CDOs Squared 0.0% 0.0% 0.0% 0.0% ABS and Structured Finance 0.0% 0.0% 0.0% 0.0% 84.4% 15.6% 0.0% 100.0% Top 15 Underlying Bank Loan Credits Bank Loan Exposure (6) Community Health 0.89% TXU Corp 0.83% HCA Inc 0.80% Georgia Pacific Corp 0.76% Univision Communications 0.75% Cablevision Systems Corp 0.61% SunGard Data Systems Inc 0.61% First Data Corp 0.60% Aramark Corp 0.58% Nielsen Company 0.54% Calpine Corp 0.53% Celanese US Holdings LLC 0.52% Idearc 0.52% Mylan Laboratories 0.52% Sabre Holdings Corp 0.50%

EUR-USD FX:

(1) Calculated using TFG shares outstanding and month end exchange price.

(2) Excludes CDO-squared and ABS CDO transactions which were written off in October 2007. TFG continues to hold the economic rights to 4 of these written-off transactions.

(3) Equivalent to Investment in Securities at Fair Value in the US GAAP Financial Statements.

(4) Investments at Amortized Cost less interest accrued since last payment date. Internal Rate of Return (IRR) x Amortized Cost B/Fwd determines CDO income.

(5) Equals CDO Amortized Cost BFwd / Book Value.

(6) Calculated as a percentage of total corporate loan assets that TFG has exposure to based on its equity-based pro-rata share of each CLO’s total portfolio (net of any single name CDS hedges held against that credit).

An investment in TFG involves substantial risks. Please refer to the Company’s website at www.tetragoninv.com for a description of the risks and uncertainties pertaining to an investment in TFG.

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.

Board of Directors Paddy Dear Reade Griffith David Jeffreys* Lee Olesky* Rupert Dorey* Alex Jackson Byron Knief* *Independent Director Shareholder Information Registered Office of TFG and the Master Fund Tetragon Financial Group Limited Tetragon Financial Group Master Fund Limited Tudor House Le Bordage St. Peter Port, Guernsey Channel Islands GYI 3PF Investment Manager Polygon Credit Management LP 399 Park Avenue, 22nd Floor New York, NY 10022 United States of America General Partner of Investment Manager Polygon Credit Management GP LLC 399 Park Avenue, 22nd Floor New York, NY 10022 United States of America Investor Relations David Wishnow / Yuko Thomas ir@tetragoninv.com Press Inquiries Finsbury Charles Chichester/Talia Druker/Rollo Head +44-20-7251-3801 Auditors KPMG Channel Islands Ltd 20 New Street St. Peter Port, Guernsey Channel Islands GYI 4AN Administrator and Registrar State Street Fund Services (Guernsey) Limited Tudor House Le Bordage St. Peter Port, Guernsey Channel Islands GYI 3PF Sub-Registrar and Transfer Agent The Bank of New York One Wall Street New York, NY 10286 United States of America Issuing Agent, Dutch Paying and Transfer Agent Kas Bank N.V. Spuistraat 172 1012 VT Amsterdam, The Netherlands Legal Advisor (as to U.S. law) Cravath, Swaine & Moore LLP One Ropemaker Street London EC2Y 9HR United Kingdom Legal Advisor (as to Guernsey law) Ogier Ogier House St. Julian’s Avenue St. Peter Port, Guernsey Channel Islands GYI 1WA Legal Advisor (as to Dutch law) De Brauw Blackstone Westbroek N.V. Tripolis Burgerweeshuispad 301 1076 HR Amsterdam, The Netherlands Stock Listing NYSE EuroNext ———————————

UNAUDITED QUARTERLY REPORT TETRAGON FINANCIAL GROUP LIMITED FOR THE PERIOD ENDED 30 SEPTEMBER 2009 AND FOR THE PERIOD ENDED 30 SEPTEMBER 2008 TETRAGON FINANCIAL GROUP LIMITED STATEMENTS OF ASSETS AND LIABILITIES as at 30 September 2009 (unaudited) 30 Sep 2009 31 Dec 2008 US$ US$ Assets Investment in Master Fund 720,846,408 1,141,950,194 Amounts receivable from Master Fund 44,603 74,366 Total assets 720,891,011 1,142,024,560 Liabilities Amounts payable on treasury shares 44,603 74,366 Total liabilities 44,603 74,366 Net assets 720,846,408 1,141,950,194 Equity Share capital 126,195 125,980 Share Premium 1,182,157,534 1,182,232,455 Capital Reserve in respect of share options 11,789,336 11,789,336 Earnings (473,226,657) (52,197,577) 720,846,408 1,141,950,194 Shares outstanding Number Number Participating shares 126,195,146 125,979,883 Net asset value per share Participating shares US$5.71 US$9.06

TETRAGON FINANCIAL GROUP LIMITED STATEMENTS OF OPERATIONS For the period ended 30 September 2009 and for the period ended 30 September 2008 (unaudited) Quarter Quarter 9 Months 9 Months Ended Ended Ended Ended 30 Sep 2009 30 Sep 2008 30 Sep 2009 30 Sep 2008 US$ US$ US$ US$ Investment income allocated from the Master Fund Interest income 39,660,355 54,472,877 136,955,255 162,688,641 Other income 281,815 - 963,552 - Investment income allocated from the Master Fund 39,942,170 54,472,877 137,918,807 162,688,641 Direct expenses Incentive fee - (10,329,924) - (21,930,546) Direct expenses - (10,329,924) - (21,930,546) Operating expenses allocated from the Master Fund Management fees (2,607,033) (4,974,128) (9,473,344) (14,123,548) Administration fees (132,004) (200,333) (457,861) (518,406) Custodian fees (16,734) - (42,104) - Legal and professional fees (44,653) (112,479) (113,099) (413,039) Audit fees (90,292) (92,447) (228,456) (238,688) Directors’ fees (50,000) (50,000) (150,004) (145,175) Transfer agent fees (28,739) (33,158) (89,916) (109,249) Other operating expenses (163,100) (336,409) (501,485) (605,164) Interest expense - (3,017,787) (592,021) (11,388,798) Operating expenses allocated from the Master Fund (3,132,555) (8,816,741) (11,648,290) (27,542,067) Total operating expenses (3,132,555) (19,146,665) (11,648,290) (49,472,613) Net investment income 36,809,615 35,326,212 126,270,517 113,216,028

TETRAGON FINANCIAL GROUP LIMITED STATEMENTS OF OPERATIONS (continued) For the period ended 30 September 2009 and for the period ended 30 September 2008 (unaudited) Quarter Quarter 9 Months 9 Months Ended Ended Ended Ended 30 Sep 2009 30 Sep 2008 30 Sep 2009 30 Sep 2008 US$ US$ US$ US$ Net realized and unrealized (loss)/gain from investments and foreign currencies allocated from the Master Fund Net realized gain/(loss) from: Investments - - - 303,684 Foreign currency transactions (4,250,644) 19,409,958 6,158,675 (1,104,697) Credit default swaps - 14,499,885 - 19,731,448 (4,250,644) 33,909,843 6,158,675 18,930,435 Net (decrease)/increase in unrealized (depreciation)/ appreciation on: Investments (3,499,523) 10,009,579 (531,855,631) 11,168,452 Forward foreign exchange contracts 1,693,573 4,355,043 2,031,931 2,477,163 Credit default swaps - (10,931,088) - (9,606,673) Foreign Exchange Options (595,500) - (5,475,600) - Translation of assets and liabilities in foreign currencies 1,090,691 (23,918,958) (6,841,244) 177,213 (1,310,759) (20,485,424) (542,140,544) 4,216,155 Net realized and unrealized (loss)/gain from investments and foreign currencies allocated from the Master Fund (5,561,403) 13,424,419 (535,981,869) 23,146,590 Net increase/(decrease) in net assets resulting from operations 31,248,212 48,750,631 (409,711,352)136,362,618

TETRAGON FINANCIAL GROUP LIMITED STATEMENTS OF CHANGES IN NET ASSETS For the period ended 30 September 2009 and for the period ended 30 September 2008 (unaudited) 9 Months Ended 9 Months Ended 30 Sep 2009 30 Sep 2008 US$ US$ Total investment income 137,918,807 162,688,641 Total operating expenses (11,648,290) (49,472,613) Net realized gain from investments and foreign currencies allocated from the Master Fund 6,158,675 18,930,435 Net unrealized (loss)/gain from investments and foreign currencies allocated from the Master Fund (542,140,544) 4,216,155 Net (decrease)/increase in net assets resulting from operations (409,711,352) 136,362,618 Dividends paid to shareholders (11,317,728) (54,342,978) Issue of shares 909,146 87,244,339 Treasury shares (983,852) (8,999,699) (Decrease)/increase in net assets resulting from net share transactions (74,706) 78,244,640 Total (decrease)/increase in net assets (421,103,786) 160,264,280 Net assets at start of period 1,141,950,194 1,188,220,992 Net assets at end of period 720,846,408 1,348,485,272

TETRAGON FINANCIAL GROUP LIMITED STATEMENTS OF CASH FLOWS For the period ended 30 September 2009 and for the period ended 30 September 2008 (unaudited) 9 Months Ended 9 Months Ended 30 Sep 2009 30 Sep 2008 US$ US$ Operating and investing activities Net (decrease)/increase in net assets resulting from operations (409,711,352) 136,362,618 Adjustments for: Net unrealized depreciation/(appreciation) on investments in Master Fund 421,103,786 (170,594,204) Operating cash flows before movements in working capital 11,392,434 (34,231,586) Decrease in receivables 29,763 110,984 (Decrease)/increase in payables (29,763) 10,218,940 Cash flows from operations 11,392,434 (23,901,662) Cash inflows/(outflows) from operating and investing activities 11,392,434 (23,901,662) Financing activities Issue of shares 909,146 87,244,339 Treasury shares (983,852) (8,999,699) Dividends paid to shareholders (11,317,728) (54,342,978) Cash (outflows)/inflows from financing activities (11,392,434) 23,901,662 Net (decrease)/increase in cash and cash equivalents - - Cash and cash equivalents at beginning of period - - Cash and cash equivalents at end of period - -

UNAUDITED QUARTERLY REPORT TETRAGON FINANCIAL GROUP MASTER FUND LIMITED FOR THE PERIOD ENDED 30 SEPTEMBER 2009 AND FOR THE PERIOD ENDED 30 SEPTEMBER 2008 TETRAGON FINANCIAL GROUP MASTER FUND LIMITED STATEMENTS OF ASSETS AND LIABILITIES as at 30 SEPTEMBER 2009 (unaudited) 30 Sep 2009 31 Dec 2008 US$ US$ Assets Investments in securities, at fair value 567,432,382 1,082,495,071 Cash and cash equivalents 149,699,437 63,042,822 Amounts due from brokers 6,675,770 114,374,113 Derivative financial assets - foreign exchange options 2,000 5,477,600 Other receivables 225,737 176,192 Total assets 724,035,326 1,265,565,798 Liabilities Payables under repurchase and swap agreements - 117,557,492 Derivative financial liabilities - forward contracts 2,809,645 4,841,576 Amounts payable to feeder fund 44,603 74,366 Interest payable - 665,976 Other payables and accrued expenses 334,670 476,194 Total liabilities 3,188,918 123,615,604 Net assets 720,846,408 1,141,950,194 Equity Share capital 126,195 125,980 Share premium 1,141,380,618 1,141,455,539 Earnings (420,660,405) 368,675 720,846,408 1,141,950,194 Shares outstanding Number Number Shares 126,195,146 125,979,883 Net asset value per share Shares US$5.71 US$9.06

TETRAGON FINANCIAL GROUP MASTER FUND LIMITED STATEMENTS OF OPERATIONS For the period ended 30 SEPTEMBER 2009 and for the period ended 30 SEPTEMBER 2008 (unaudited) Quarter Quarter 9 Months 9 Months Ended Ended Ended Ended 30 Sep 2009 30 Sep 2008 30 Sep 2009 30 Sep 2008 US$ US$ US$ US$ Interest income 39,660,355 54,472,877 136,955,255 168,254,245 Other income 281,815 - 963,552 - Investment income 39,942,170 54,472,877 137,918,807 168,254,245 Management fees (2,607,033) (4,974,128) (9,473,344) (14,585,744) Administration fees (132,004) (200,333) (457,861) (534,511) Custodian fees (16,734) - (42,104) - Legal and professional fees (44,653) (112,479) (113,099) (431,283) Audit fees (90,292) (92,447) (228,456) (246,261) Directors’ fees (50,000) (50,000) (150,004) (150,000) Transfer agent fees (28,739) (33,158) (89,916) (112,943) Other operating expenses (163,100) (336,409) (501,485) (621,414) Interest expense - (3,017,787) (592,021) (11,835,507) Operating expenses (3,132,555) (8,816,741) (11,648,290) (28,517,663) Net investment income 36,809,615 45,656,136 126,270,517 139,736,582 Realized and unrealized (loss)/gain from investments and foreign currency Net realized gain/(loss) from: Investments - - - 322,349 Foreign currency (4,250,644) 19,409,958 6,158,675 (2,385,457) transactions Credit default swaps - 14,499,885 - 20,119,865 (4,250,644) 33,909,843 6,158,675 18,056,757 Net (decrease)/increase in unrealized (depreciation)/appreciation on: Investments (3,499,523) 10,009,579 (531,855,631) 10,806,962 Forward foreign exchange contracts 1,693,573 4,355,043 2,031,931 2,526,799 Credit Default Swaps - (10,931,088) - (9,786,587) Foreign Exchange Options (595,500) - (5,475,600) - Translation of assets and liabilities in foreign currencies 1,090,691 (23,918,958) (6,841,244) 1,471,054 (1,310,759) (20,485,424) (542,140,544) 5,018,228 Net realized and unrealized (loss)/ gain from investments and foreign currencies (5,561,403) 13,424,419 (535,981,869) 23,074,985 Net increase/(decrease) in net assets resulting from operations 31,248,212 59,080,555 (409,711,352) 162,811,567

TETRAGON FINANCIAL GROUP MASTER FUND LIMITED STATEMENTS OF CHANGES IN NET ASSETS For the period ended 30 SEPTEMBER 2009 and for the period ended 30 SEPTEMBER 2008 (unaudited) 9 Months Ended 9 Months Ended 30 Sep 2009 30 Sep 2008 US$ US$ Investment income 137,918,807 168,254,245 Operating expenses (11,648,290) (28,517,663) Net realized gain from investments and foreign currency 6,158,675 18,056,757 Net unrealized (depreciation) / appreciation on investments and translation of assets and liabilities in foreign currencies (542,140,544) 5,018,228 Net (decrease) / increase in net assets resulting from operations (409,711,352) 162,811,567 Dividends paid to shareholders (11,317,728) (68,622,012) Issue of shares 909,146 9,187,384 Treasury shares (983,852) (8,999,699) (Decrease) / increase in net assets resulting from net share transactions (74,706) 187,685 Total (decrease) / increase in net assets (421,103,786) 94,377,240 Net assets at start of period 1,141,950,194 1,264,437,956 Net assets at end of period 720,846,408 1,358,815,196

TETRAGON FINANCIAL GROUP MASTER FUND LIMITED STATEMENTS OF CASH FLOWS For the period ended 30 SEPTEMBER 2009 and for the period ended 30 SEPTEMBER 2008 (unaudited) Quarter ended Quarter ended 30 Sep 2009 30 Sep 2008 US$ US$ Operating and investing activities Net (decrease) / increase in net assets resulting from operations (409,711,352) 162,811,567 Adjustments for: Realized gain on investments - (322,349) Non cash interest income on investments (25,070,302) 105,585,526 Unrealized losses/(gains) 542,140,544 (5,018,229) Operating cash flows before movements in working capital 107,358,890 263,056,515 (Increase) / Decrease in receivables (49,545) 11,665,717 Decrease in payables (837,263) (7,205,678) Cash flows from operations 106,472,082 267,516,554 Proceeds from repayments on investments - 322,349 Cash inflows from operating and investing activities 106,472,082 267,838,903 Financing activities Amounts due from brokers 107,698,343 (20,163,549) Proceeds from issue of shares 909,146 9,187,384 Treasury shares (983,852) (8,999,699) Dividends paid to shareholders (11,317,728) (68,622,012) Repayment on repurchase and swap agreements (117,557,492) (274,621,701) Bank overdraft - 252,826,526 Cash outflows from financing activities (21,251,583) (110,393,051) Net increase in cash and cash equivalents 85,220,499 157,445,852 Cash and cash equivalents at beginning of period 63,042,822 209,237,922 Effect of exchange rate fluctuations on cash and cash equivalents 1,436,116 24,928 Cash and cash equivalents at end of period 149,699,437 366,708,702

For further information, please contact: TFG: Press Inquiries: David Wishnow/Yuko Thomas Finsbury Investor Relations Charles Chichester/Talia ir@tetragoninv.com Druker/Rollo Head +44-20-7251-3801

PRN NLD

Source: Tetragon Financial Group Limited

For further information, please contact: TFG: David Wishnow/Yuko Thomas, Investor Relations, ir at tetragoninv.com. Press Inquiries: Finsbury, Charles Chichester/Talia Druker/Rollo Head, +44-20-7251-3801