Abrdn Diversified Income... Share Discussion Threads

[hugepants] 07/3/2024 15:29

You should tell the PE funds that because their share prices don't agree. Unfortunately ADIG has only about 10% PE. The PE funds have massively outperformed ADIG the last few years. They are up 40%ish whereas ADIG is down 30%+

[thrugelmir] 07/3/2024 15:15

With the cheap money era over. Shakedown is envitable. Higher interest rates will hit some Private Equity models hard. Likewise more recent entrants to the alternative space.

[citytilidie] 07/3/2024 14:41

I put it down to Aberdeen being the Fund Manager. Aberdeen’s own share price and performance says it all. They must be hemorrhaging AUM.

[essentialinvestor] 07/3/2024 11:20

HP, you asked earlier this week ...who is selling at 76 pence ? ..

Well now 74.6 on the bid (time of this post)
which some appear to be taking.

[cousinit] 07/3/2024 11:11

There are an increasing number of trusts in wind-down. There's usually a handful at various stages, but the list is only increasing at the moment and there are probably a few more going to be added as the IT sector retrenches to address over supply/insufficient demand.

That probably suggests that it might take a while for share registers to shake out as buyers seem to be very selective and have some ability to name their price in providing liquidity for decent sized clips.

[spectoacc] 07/3/2024 09:01

1.4p XD today, but still a good question.

[essentialinvestor] 07/3/2024 08:52

How low can it go ..

[hugepants] 06/3/2024 09:26

Those selling at 76p clearly know something I dont! Just seems bananas selling at this price when there is so much low risk upside to come.

[riskvsreward] 29/2/2024 16:35

Realising some loss for annual capital gain report?

[spectoacc] 29/2/2024 14:38

Ah! Good spot - sold at 77.4p, bought at 77.6p - how very "ADIG". :)

[tiltonboy] 29/2/2024 14:37

...and bought 52k

[spectoacc] 29/2/2024 14:15

A non-exec sold nearly 32k shares - not a great look.

[essentialinvestor] 27/2/2024 13:26

NAV heading imperceptibly towards £1 ?.

[skinnypope] 23/2/2024 09:09

My back of the envelope calculation has total current annual dividends paid out at around £17m. I pulled apart the portfolio and using the known dividends and coupons on the equities and bonds, I have them contributing around £5-6m of that.

So there is, and should continue to be, decent income from the private assets for ADIG to downstream to the shareholders. The only issue being that the private assets don't tend to have regular payment schedules, and often pay back lumps of capital as and when they dispose of assets.

So the future divis will just simply be a passthrough of those flows as and when they get them. The Tranche 1 assets are nearing maturity and typically private funds pay back more as they reach maturity (as they aren't investing in new assets), so I think there should be reliable flows in the near future. They are just impossible to predict!

My DCF model has the dividend dropping to £10m after the liquid assets are sold, then amortising down to £5m for 2027, then £3m after Tranche 1 matures. Total guesswork, but it should not be a million miles off.

Using those flows, I still see the IRR in the range of 15-18% from here (depending on how optimistic / pessimistic I am on haircuts taken on the disposals)

[8w] 22/2/2024 21:43

Thanks for responses.

[tiltonboy] 22/2/2024 16:04

No guidance yet

[hugepants] 22/2/2024 16:04

They say that going forwards dividends will be smaller and less regular whereas returns of capital will get bigger and less regular. Same end result though. This from the recent circular;

Dividends

The Board intends that it will continue to pay a sufficient level of dividend to ensure that the Company will not retain more than 15 per cent. of its income in an accounting period so as to maintain the Company's investment trust status during the Managed Wind-Down process. In addition, and in accordance with the Company's proposed dividend policy that is set out in the Accounts and will be put to Shareholders at the AGM, any dividend going forward will also reflect the Company's plan to return cash to Shareholders in a tax efficient manner. Therefore if Shareholders vote to approve the Investment Policy Resolution and put the Company into Managed Wind-Down, the Directors will still declare certain dividends based on the Company's net income but the quantum and timing of any dividends going forward will be at the sole discretion of the Board.

In the absence of unforeseen circumstances, it is the current intention of the Board that the Company will pay an interim dividend around the end of March 2024, the Initial Return of Capital (subject to all the required Shareholder and Court approvals being received as noted above) around the end of June 2024 and a further interim dividend around the middle of October 2024. Thereafter, it is likely that dividends will be paid in smaller, less regular amounts principally for the purpose of maintaining the Company's investment trust status and capital will be returned progressively to Shareholders in larger, less regular amounts by the most efficient mechanism available. The Board will therefore be taking into account the UK tax consequences for Shareholders in determining the most efficient means of returning realised cash during the Managed Wind-Down process.

[8w] 22/2/2024 15:53

Has there been guidance on future dividend payments as and when the equity rump has been sold?

Minded to reinvest cash into ADIG but would like cashflow whilst waiting for eventual fund closure.

[essentialinvestor] 22/2/2024 10:52

Still reckon we need a sharp % down move to clear out weaker hands, preferably followed by an intra-day reversal.

May transpire differently.

[riverman77] 22/2/2024 10:39

Yes implied discount looks too wide. And the key difference is ADIG is winding up so eventually that discount will disappear - not the case with the other PE funds, which are on permanent discounts.

[skinnypope] 22/2/2024 10:13

I'd even say the 45% computed discount on the private assets is out of line with other quoted pure play private funds e.g.

APAX - 33%
CTPE - 33%
ICGT - 40%
GABI - 25%

[chucko1] 21/2/2024 12:33

I agree - a fair amount is likely less volatile. They would really have to mess up for many of those assets to lose even 15%, let alone the imputed 45% discount represented by the forward price (assuming close to NAV for the first group of assets).

[riverman77] 21/2/2024 12:29

Most of their private markets exposure seems to be infrastructure and property, rather than private equity. I'd imagine these should deliver fairly steady, dependable returns. There are a few more esoteric assets which are harder to value, including a Burford fund, but from what I can see they don't seem to be holding much in the way of junk that would need to be written off.

[chucko1] 21/2/2024 10:23

R77, and if you set your sights lower than a "mere" doubling, you really have a decent margin of safety even taking into consideration the lack of strength in the management team.

Given the assets in the second and third groups, I am a little more conservative than you, but I certainly cannot fault the general message.

Possibly worth pointing out that APEO trades at a tighter discount then many, so it is not as though the market has any particular suspicions about their PE valuations. No sign of a cliff at some stage, which is what could scupper the above brief analysis.