Abrdn Diversified Income... Share Discussion Threads

[rcturner2] 01/3/2023 08:13:05

Yes but the risk free rate will change as will bond coupons, and not in a good way. We have had a spike in those rates they will calm down over time. I am pretty sure all of us have a balanced and diverse portfolio, ADIG has a role in that.

[tiltonboy] 01/3/2023 07:25:57

A managed wind-down of the trust should achieve close to NAV. I'm not suggesting selling everything now, but to return capital when it becomes available. By re-investing into further PE investments, perpetuates the issue.

The vast majority of shareholders didn't vote, so does that make them happy!

Voting against the resolutions was aimed at sending a message. The directors summarily failed to stick to the 5% DCM, and took two years to abandon it. As I have previously conceded, Nalaka has done a decent job, but the world has changed.

With a risk-free rate of 4%, and decent-credit bonds matching the yield on ADIG, the case for investment is less compelling

[spectoacc] 01/3/2023 07:21:15

That so many are perfectly happy with ADIG's NAV performance is why I really should set up an IT of my own :)

@Tiltonboy - in as co-manager?

[rcturner2] 01/3/2023 07:11:19

Winding up the trust will not get you back the NAV, lots of stuff will have to be sold at a discount if they have to find buyers for everything. Despite the moaners on here it is quite clear that the VAST majority of shareholders are perfectly happy with the trust.

[spectoacc] 01/3/2023 06:52:55

@WUNDERBAR - the first part of your last paragraph explains why many on here want to see ADIG wound up.

[thrugelmir] 28/2/2023 22:32:29

Unless institutional investors step in. Retail investors alone aren't going to drive the share price higher. There's relatively little interest in UK stocks from what in the USA are called "hobby investors". Since the turn of the year in US markets retail investors have been net buyers while institutions are net sellers. This bear market is far from over. That's for sure.

[wunderbar] 28/2/2023 22:02:28

Re HOME REIT. In the full year report y/e 30 Sep 2022, ADIG's holding was worth £1.449m. According to ADIG's Portfolio Holding Summary for Nov 2022 [downloaded from company website] the value had plummeted to £807k [ADIG held 1.6m shares]. Note there was no mention of HOME REIT being a significant holding in the Interim report therefore we can deduce ADIG acquired majority of stock between 1 Apr and 30 Sep 2022, likely paying between 100-120p a share before bailing out in Dec 2022 around 34-50p. I reckon ADIG has lost between £800k and £1.38m on this investment. I'm sure Nalaka De Silva will be very keen to sweep this one under the carpet.

I'll say very quickly I strongly disagree with winding up the trust. I simply can't understand the mentality of anyone voting this way. Today's AGM result showed overwhelming support for the continuation of the company [almost 92% of votes]. What's to be gained from closing the trust? More than half of ADIG's investments are now in Private Markets, these investments typically take 5-10 years to mature. At present we're only 2.5 years into the new investment strategy. Patience is required here. If anyone on this bb doesn't want to play the long wait or simply hates ADIG [and there seems to be quite a few here] then simply sell your shares and move on to pastures new rather than repeating the same mantra of winding up the company. In the meantime I'm quite content to sit tight and collect the generous quarterly dividend.

I think the current share price circa 88p is very attractive entry point, offering a yield of 6.38%. So much so I've been buying up more stock in recent days and will continue should it dip further. In general this is a very boring and reliable stock. Sure, the share price performance in past few months has been disappointing but hopefully it can start grinding its way back up just as it did post Covid crash. It is still my intention to sell up to 50% of my holding around 98-100p purely because I'm top heavy in ADIG [too many eggs in one basket].

The steep discount to NAV remains a big problem and I do agree with comments about ADIG management being accountable for letting this discount persist, it's simply unacceptable, more so given the discount has now widened to 25%, a far cry from the now defunct target of 5%.

Whilst I've said patience is required here I would still be critical of the trusts performance with regards to the almost negligible growth rate in NAV. At year end it was 117.6p, five months later it's barely changed. Given we're just a month away from Interim cut off point of 31 March [half year report published three months later] it's looking odds on for another period of non-growth. Note two years ago [Sep 2020], around the time ADIG changed investment strategy, NAV was 113.4p. Since then little progress has been made, NAV increasing just over 4p [3.57%] during this period [very poor considering the market has bounced back strongly from Covid lows]. I’d like to see both Nalaka De Silva and chairman Davina Walter acknowledge this sluggish progress rather than pulling the wool over investors eyes with manipulated data. The double digit growth rate they quote is merely attributable to the inclusion of the healthy dividend income. Strip this out and the key stats reveal a pretty unspectacular performance this past 12 months with share price down 13.66% and NAV barely changed. Forget about Private Markets for a moment, why aren't Equities or Credit Income having a positive impact on NAV? For these reasons it’s easy to understand why many shareholders are dissatisfied at present.

[wllmherk] 28/2/2023 21:07:20

Must be due to go ex-div soon, last year was 3rd March,

wllm

[tiltonboy] 28/2/2023 17:27:27

Be interesting to see what they sold HOME at, given the bear raid.

[peckers56] 28/2/2023 17:20:32

Recent buybacks (3.1m in the last month) are likely to continue. Trust sold out of Home Reit in December (at a loss). Manager believes 18 months is not long enough to prove/disprove new strategy works - will likely continue as is. Portfolio a lot less riskier than before. Drastically reduced its "junior" status loans into "senior" ones. Will be 2-3 years before the dividend is fully covered. Some £78m of outstanding commitments. Average life of PE holdings (e.g. litigation, infrastructure, etc) 6 years.

[hohum1] 28/2/2023 16:44:47

Thanks for the update - disappointing (but almost inevitable) outcome. Only 1.4m votes against continuation last year and so moving in the right direction. Sensible proposals from Peter Spiller. I presume that the Board stuck their collective fingers in their ears…

[peckers56] 28/2/2023 16:39:19

Attended today's AGM - lots of shareholders present - nearly all unhappy!! Continuation passed by over 90%. Peter Spiller (Capital Gearing's IM, and circa 1% shareholder of ADIG) put forward "suggestions" to the board about the way forward (a)commit to upholding the trust's prospectus statement of ALWAYS around 5% discount, (b) stop committing to new PE (c) use distribution of cash from "closed" PEs to buy back shares. He believes only with the percentage of the trust in PE being reduced, will the market look more favorably on the trust = causing the discount to narrow over time.

[tiltonboy] 28/2/2023 16:38:25

Disappointing that only 7.5m shares were voted against the Continuation of the company, with a few more voting against the re-election of individual directors!

[hugepants] 28/2/2023 14:19:09

continuation vote passed I assume

[tiltonboy] 28/2/2023 07:45:21

IMHO anything above 15% and they will note it, and say they will engage with shareholders. Anything above 20%, and they should be questioning the viability of the Trust

[hohum1] 28/2/2023 07:13:43

Votes cast - but, frankly, any decent Board would start a strategic review if there was a sizeable vote against continuation…

[thrugelmir] 27/2/2023 18:45:01

Perhaps a TR1 form will be filed shortly.

[tiltonboy] 27/2/2023 17:39:54

...and another 300k

[hugepants] 26/2/2023 21:30:17

Anyone know the threshold regarding the continuation vote. I assume it's 50% but of votes cast or total votes?

[thrugelmir] 25/2/2023 09:25:59

The quantities being bought back suggest that an institutional investor is offloading. There's large volumes of stock being traded since the beginning of the year. Some 20 million shares already.

[hohum1] 25/2/2023 09:17:21

True - but upping the buyback substantially in the week ahead of the AGM has more than a whiff of panic about it. For the large part, their buyback efforts have been paltry and the discount is now embedded. Once the AGM is out of the way, there’s every likelihood the large buybacks will stop.

[rcturner2] 25/2/2023 07:59:42

Buying back at such a discount is a sensible thing to do.