Abrdn Diversified Income... Share Discussion Threads

[hugepants] 07/7/2023 15:13

ADIG do release a daily NAV unlike many alternative type trusts which release a monthly or quarterly NAV so Id argue NAV more reliable then many. 54% private markets with the rest are listed equities or funds. Some of the private stuff could be marked down given the recent increase in rates but just because something is listed does not mean it's valued accurately eg they hold GCP which is on a 40% discount. Is that realistic?

Sound prudent re valuations.

abrdn Holdings Limited announces the unaudited net asset values (NAVs) of the following investment companies as at close of business on 6 July 2023. Unless otherwise disclosed, the NAVs have been calculated in accordance with the recommendations of the Association of Investment Companies. In particular: (1) financial assets have been valued on a fair value basis using bid prices, or, if more appropriate, a last trade basis; (2) debt is valued at par and, where applicable, debt is also separately valued at market value (3) diluted NAVs are disclosed where applicable (for this purpose, treasury shares are excluded for the purposes of calculation); and (4) provisions for performance fees are included where applicable.

[spectoacc] 07/7/2023 15:01

@HP - agree re review BUT they shifted more into PE-type stuff on last review. That means they can't be easily wound up, don't easily slot in with anyone else, and deserve a discount bassed on how genuine, successful PE IT's trade at up to 45% discount.

Probably a discount nearer 20% than here, but still - ADIG seems to lack a purpose.

[essentialinvestor] 07/7/2023 13:39

Yup that's the question, how 'accurate' is the NAV?.

Market arguably appears to have questions.

[atlantic57] 07/7/2023 13:28

If that 29.5% discount is realistic then adig is a raging buy given the 7% yield.
However the fact that the share price is falling suggests that it is not realistic.

[hugepants] 07/7/2023 13:14

The buybacks have stopped since the strategic review so not much share price support when the market sells off. I think it's significantly oversold given there is a strategic review ongoing on how to realise value for shareholders. It's on a 29.5% discount and 7% yield at this price.

[cc2014] 06/7/2023 14:22

80p. Wow. A month ago I'd have taken this price. Not now. Or at least not today.

All the buyers seem to have dried up. Lots of opportuntities elsewhere perhaps.

Spending all that money buying back the 2031 bonds at a huge loss doesn't seem very clever now.

[essentialinvestor] 27/6/2023 19:26

... delivering steady investment performance..

I might call that imaginative, or perhaps something less kind ;.

[topvest] 27/6/2023 19:09

The board have performed very badly in their decision making with this trust. 4th quartile. Surely they can be more imaginative!

[spectoacc] 27/6/2023 15:16

81.3629 in fact, on the sell - you'd think buyer & seller might get together! Don't see that very often.

[hugepants] 27/6/2023 15:14

81.362p to buy. Tight spread then!

[spectoacc] 27/6/2023 15:12

81.36p to sell 25k (just sayin').

[hugepants] 27/6/2023 14:51

fyi you can buy pretty much at the bid price (81.3p) just now for a 7% yield.

[thrugelmir] 23/6/2023 18:58

I've thrown in the towel on this particular investment. As the headwinds are simply so great at a broader macro level. Battening down the portfolio hatches and waiting for the storm now.

[hohum1] 23/6/2023 14:05

This is pretty desperate stuff: they announce a strategic review and the share price has a 5 minute bounce before reverting to a 25+% discount. No one can see who’s going to merge with it. No one gives a monkeys - put it into run off: sell off the liquid stuff, give us 40+% back straight away and work out a programme to get rid of the rest. Abrdn can surely find buyers for the private funds managed by them and some of the 2018-19 vintage private investments will be near the end of their lives (eg Burford Opportunity Fund). With a bit of luck and a fair wind, we might get out at a 10% discount overall…

[spectoacc] 21/6/2023 06:53

Agreed, merger of some sort, or "we've done a review, spent some money, and turns out major shareholders support the status quo".

This from @HP's link sums it up:

"We cannot help but feel sorry for shareholders in ADIG who have endured endless rethinks of strategy and changes of manager. The push into private investments that was the latest great idea (not that long ago) effectively means that even if exasperated investors just say they want their money back, it is going to be a long wait."

[tiltonboy] 21/6/2023 06:33

topvest, I very much doubt it will be a wind-up

[topvest] 20/6/2023 21:07

The board have messed-up here. I always think announcing a strategic review comes from a clueless board. It's basically hoisting a white flag and saying - we are desperate, and don't know what we are doing. They should earn their fees and come up with something in private. Anyway, what mandate do they have to wind-up given a 91% continuation vote. I'm sure that there is a far better investment manager that would be very keen to take this on. The two previous decisions - BlackRock and abrdn were not really distinctive investment propositions.
If you read Citywire today then any merger / wind-up is difficult with debt out to 2031 and illiquid assets.

[essentialinvestor] 20/6/2023 12:06

How are they defining ..steady investment performance...?

[hohum1] 20/6/2023 11:41

The Board need to give shareholders a clear view of the liquidity profile of the portfolio: how much is immediately liquid, how much 6m, 1year etc. Recent communications have been appalling - no proper asset allocation, little commentary on holdings (apart from the winners - the private infrastructure fund and the Burford fund), no income profile (despite an uncovered dividend) and no acknowledgement of past mistakes - reducing the debenture at record low gilt yields has been very costly indeed. No wonder this trades at a 25+% discount.
Hopefully, a merger with something much bigger and a decent cash alternative will see us recover some of the value destruction of recent years.

[hugepants] 20/6/2023 10:12

Quite like that idea. Some kind of cash element is probably key to getting a return close to NAV. They could sell the listed fixed income portfolio.
Who would be the prime suspects as regards a combination?

[tiltonboy] 20/6/2023 08:07

I think this time something will happen. Would guess a merger with another fund, and a 25% cash element

[topvest] 20/6/2023 07:59

This investment trust has been around since 1898 and deserves a better board and investment strategy than it currently has. Both BlackRock and abrdn have been poor. I don't want it to wind-up, but I don't really like the current approach.

abrdn are having an awful year for their investment trusts....this, abrdn Japan, abrdn Latin American, abrdn smaller companies income all under review / wind-up. All too small and relatively unsuccessful.

[spectoacc] 20/6/2023 07:35

It's always set up to not quite exclude a winding-up, but to make it highly unlikely as the outcome. Eg:

"...Despite the investment team delivering steady investment performance, above their new strategy's target and in exceptionally volatile markets...".


ie "We're doing great, it's you, not us".


And:
"This has also included the increased diversification of the portfolio into private markets exposures that are more challenging for many investors to access directly."


Yet they wonder why the discount is so large? Plenty of direct access to private markets from a plethora of ITs, all on massive discounts (HVPE, OCI, PEY, NBPE, APEO etc).

[cc2014] 20/6/2023 07:34

"As part of this exercise, we will consider all options, including, but not limited to, a combination with an existing investment trust"

I've got to say I'm not sure why the strategic review. Do they not talk to their major shareholders on a regular basis? or perhaps the shareholder turnover has been so large they need to start again?

lol- so what we need to do is find another investment trust running at a massive discount and put the two together?