Abrdn Diversified Income... Share Discussion Threads

[tiltonboy] 18/4/2024 14:26

Looks like they have stopped issuing factsheets and holding summaries which doesn't help

[genista71] 12/4/2024 10:46

Cant trust this lot, neither the board nor the manager

[sll] 09/4/2024 10:22

Attended AGM/GM 27/2/24 and spoke with a couple of ADIG Directors, after the formal parts, which I supported. Impressed on them that 'time is indeed money'. The sooner they liquidate positions, the lower the value that may be attainable. When they part with the easier to sell 'more liquid' holdings, as detailed to the meeting, the entirety of that circa 30% discount will (unless it re-rates) transfer to the 'less liquid' positions. So, If we have 106p? NAV now and an share price of (say) 74p (being 30% discounted) if (say) 24p (of undiscounted liquid assets) can be realised sooner, at close to par, then the NAV moves down to circa 82p and the post-capital redemption share price might move down to circa 50p? (74-24) taking it down to a 39% discount. There are ZERO guarantees here, but a future upwards re-rating may be entirely conceivable? as 'more time' is allowed for the less liquid off-market positions to mature, closer to (or even above stated NAV?)as the Board conceives 'may be possible'. So, I'd prefer to wait longer, rather than settle for less sooner, and privately expressed that view.

[adae] 09/4/2024 06:51

@grahamg8, you rightly mention the downside risks, but there's also upside risk. The private holdings may come out either at NAV or higher, with a few more years of investment growth behind them.

That which goes at a discount will be mainly due to being sold early - leading to earlier returns, and hence a better calculation.

[markth] 08/4/2024 18:00

Yes grahamg8 we are in violent agreement. I note also (and this may be relevant) that there is a negative correlation between discount and investment trust size at the moment. Those trusts with NAV under 100m seem particularly worse affected. Having arbed a few wind downs, there are opportunities there. But at some point the management will say it's no longer feasible to maintain a public listing, let's delist. It's best to be out by then, YMMV but I've been screwed by that more than once.

[essentialinvestor] 05/4/2024 13:36

Thanks for the view, clearly more cautious than orhers outlined here however it's none the less worth considering.

[skinnypope] 28/3/2024 11:25

A small note from me re the NAV "dips" in last week or so.

I'd say this is consistent with the cash going up as the liquid portfolio is realised, due to transaction costs and bid/offer slippage etc.

I had 5% costs for the liquid portfolio which is perhaps conservative, but I do note that 1p drop in NAV = £3m. The recent cash increase to £58m suggests a ~£50m liquidation. So maybe it cost ADIG £3m to raise £50m = 6% cost? I suspect this is just a coincidence!

[essentialinvestor] 26/3/2024 12:36

CC, this is one of the reasons for the % discount - uncertainty around the 'reliability' of the NAV.

[cc2014] 26/3/2024 12:27

hmm. NAV dropped nearly a penny yesterday. (0.94p)

[mandihong] 26/3/2024 08:57

The 3% may possibly have been used to pay/invest into draw requirements in existing funds. i.e. "meet outstanding commitments in respect of its private
markets portfolio (such commitments amounting to c.£38.4 million in total)"

[cc2014] 26/3/2024 07:50

Why only put 3% in liquid cash equivalents? Why not all of it?

[spectoacc] 26/3/2024 06:46

That definition to me is "cash". Perhaps ADIG are taking it literally.

[essentialinvestor] 25/3/2024 22:03

Ah, right - appreciated.

The benefit of reading diligently.

[strathroyal] 25/3/2024 21:58

This paragraph was included in the new investment objective and policy when they issued the winding up circular:

Any cash received by the Company as part of the realisation process prior to its distribution to Shareholders will be held by the Company as cash on deposit and/or in liquid cash equivalents securities (including direct investment in treasuries and/or gilts, funds holding such investments, money market or cash funds and/or short-dated corporate bonds or funds that invest in such bonds) pending its return to shareholders.

[essentialinvestor] 25/3/2024 21:50

* good point - and it can't be the bond redemption either as that's second week of April.

[spectoacc] 25/3/2024 20:22

Why has the net cash fallen from last report? Have I forgotten a large XD?

[skinnypope] 25/3/2024 19:01

@Essential - yes IRR assumes reinvestment (this is standard in the calculation).

[tiltonboy] 25/3/2024 15:22

Only tiny in the scheme of things (£1.2m) but the Majedie equity fund repaid in February.

[essentialinvestor] 25/3/2024 15:18

Skinny, are your calcs based on reinvesting the 38 pence back, or not?. Thx

I'm guessing it's in keeping all cash returns.

[skinnypope] 25/3/2024 13:41

I've not got much new commentary to add here as all the facts remain the same, and also as others have done a great job keeping this board up to date.

I have watched the NAV discount creep ever wider which, coupled with time passing, has continued to push up the IRR from my cashflow model. My inputs and assumptions are unchanged, and still somewhat conservative on liquidation costs. I see the IRR now just over 20% out to the end of 2028.

This is now above where private funds target; for example the flagship Oaktree Opportunities Fund is currently open for another tranche, with a target IRR of 16-21%

Having sat on the sidelines with my current holding, I have just bought in here.

Good luck all.

[essentialinvestor] 22/3/2024 15:27

Yes, selling in to strong markets may be supportive to cash returns. Valid observation.