Abrdn Diversified Income... Share Discussion Threads

[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?

[hugepants] 20/6/2023 07:32

Davina Walter, Chairman of the Company commented:

"While the Board is encouraged by the management of the Company's portfolio, the Company's shares continue to trade at a persistently deep discount to net asset value. It is the Board's view therefore that a strategic review of the Company is required to consider how we can best optimise value for shareholders. As part of this exercise, we will consider all options, including, but not limited to, a combination with an existing investment trust.

[spectoacc] 20/6/2023 07:05

Just wind it up! Why the so-frequent reviews, that ultimately always go nowhere?

Another:


"The Board will immediately consult with shareholders and welcomes their views on the best strategic option for the Company. The Company will update the market on the progress of the strategic review in due course, noting that at this stage there can be no certainty as to the final conclusions and/or outcome of the review."

[cc2014] 07/6/2023 12:28

I see they are trying to do something about the discount but they also need to do something about the return.

2.2% over 6 months isn't terrible. At least it's positive but I score it 5/10. Need to do better.

I've been through the investments quickly this morning. They didn't excite me.

I like the discount but I'm going to require a spike down in the spike to put my cash to work here.

[hugepants] 07/6/2023 08:58

Interims


...However, the Company's share price total return (which assumes dividends are reinvested) was -6.5% with the share price discount to NAV widening from 23.7% to 29.8% at 31 March 2023. The drop in the share price appears to be driven predominantly by the stock market currently applying a substantial discount to private equity assets, reflecting uncertainties over asset valuations. Although your Company has under 12% of its assets in private equity investments, this substantial discount appears to have been applied to all the Company's private market assets, even to sectors such as infrastructure (comprising 16% of the Company's assets), which typically trades on a tighter discount.

The Board appreciates the frustration of shareholders at this share price performance. To address the issue, the Board and Manager continue to communicate to the market the quality of the Company's portfolio and the steady NAV returns it has generated.

[thrugelmir] 27/5/2023 14:09

Not just ADIG. Institutional money is increasingly being parked in cash. Forward view suggests there's a dip on the horizon.

[spectoacc] 26/5/2023 14:53

Obviously we're still unloved - but are we a little less unloved? Been no drop with change in base rate expectations.

[thrugelmir] 23/5/2023 21:55

I suspect more likely to be a disgruntled stock holder. That's held on for far too long. In the vain hope of recovering their losses.

[atlantic57] 23/5/2023 17:08

Thrugelmir is there some artificial intelligence that automatically gives the thumbs down to posts.I notice no poster ever offers any alternative view to the post marked down.

[thrugelmir] 22/5/2023 18:23

May well explain the continual buybacks and contraction of the asset base. News wise been very quiet for a while.

[tiltonboy] 22/5/2023 09:06

They are re-organising their Private Markets teams, so it's not beyond the realms of possibility

[hohum1] 22/5/2023 08:44

Have only just heard (on Jonathan Davies’s podcast) that another Abrdn trust (AJIT) has thrown in the towel. Too much to hope that ADIG will do the same any time soon…

[atlantic57] 12/5/2023 09:08

Cc2014

Can you share other places clearly not investment advice
Thanks

[hohum1] 12/5/2023 08:42

The March factsheet says that they do have exposure to Burford Capital’s Petersen case via the unlisted investment, BOF. Checking back, the ADIG NAV went up by 1.5p on the day of the Peterson announcement and BUR shares have been strong since then so there may be more to come.