Abrdn Diversified Income... Share Discussion Threads

[hugepants] 16/2/2024 16:03

Well EI if you can point to any other liquidating trusts that are debt free and paying a dividend that are on mid 30s discount I'll reassess.

Running some numbers. Shares to buy currently 77.25p versus NAV 109p

Dividend of 1.56p dividend at beginning of March
Then 38p capital repayment before end June. So shareholders get 39.5p in 4.5 months

Thereafter NAV becomes 69.5p
If full 39.5p comes off then new share price 37.75p which is a 45% discount to NAV. No way is that happening.
For a post cash return and your predicted 35% discount then new share price is 45p. Even that gives a 10% return from where we are now.

[essentialinvestor] 16/2/2024 13:25

NAV continues to ease lower, are these some year end valuations coming through and if so, might there be more
significant falls to follow..


HP, may be looking at a mid 30's % discount to NAV post return (best guess).

[essentialinvestor] 16/2/2024 11:07

* on the NAV discount Not widening post capital return.

[hugepants] 15/2/2024 22:15

Not really. Some of the fixed income type alternative ITs have reported far bigger drops. Some reits also.

[essentialinvestor] 15/2/2024 22:05

HP, to term you a relentless optmist is an understatement ; good fortune.

[hugepants] 15/2/2024 22:02

I don't think that's too bad given a large chunk of the portfolio is fixed income type stuff. Once interest rates reverse the NAV should start trending up.

[essentialinvestor] 15/2/2024 22:00

NAV spprox 5% lower on the last 6 months.

[hugepants] 15/2/2024 21:58

I honestly cant see the discount widening further. The business is winding down, returning capital and paying dividends along the way.

[essentialinvestor] 15/2/2024 21:56

Are you basing that on keeping your remaining holding post capital return?
as I can see the discount widening further.

And as has been highlighted, NAV is ticking lower.

[hugepants] 15/2/2024 21:50

The circular was published last week. I don't think there's much new in there.


It's not particularly exciting but Id think there's a fairly easy 10%+ total return by end of June (including 1.56p dividend) to be made as the shares adjust to the 38p per share capital repayment. That assumes the shares trade at a 30% discount.

[thrugelmir] 15/2/2024 15:11

So glad I bailed out of this stock. Once held a sizable position.

[tiltonboy] 15/2/2024 14:43

EGM on 20th. Get your votes in

[essentialinvestor] 15/2/2024 13:27

Ok, appreciate the view, thanks.

[chucko1] 15/2/2024 12:37

No - but the incessant fall in NAV is what I feared, to some extent. Oh, and the name "abdrn" - by definition, it stretches one's ability to take the whole thing seriously. Hence I only have a small size (position, that is).

Edited since "abdrn" was rejected by autocorrect. Was turned into "abrade". Says it all.

[essentialinvestor] 15/2/2024 12:21

Have posters given up on this...very quiet here..?

[essentialinvestor] 02/2/2024 14:22

Anyone with a view on the SP, possible re-test of November lows, higher low if more optimistic..?

[essentialinvestor] 01/2/2024 13:26

ADIG moving in to a lower trading range?.

[essentialinvestor] 23/1/2024 19:40

I wondered would this be available under 75 pence again, perhaps wider market strength is helping, at least for now.

[neilyb675] 19/1/2024 11:35

78.40 - 80.60 (GBX) at 11:17:55
on Market (LSE)

[davebowler] 12/1/2024 15:35

Mindset of the week
“Overall, we enter the new year with the mindset that we are continuing to travel towards the danger, rather than away from it, and we will not let a disappointing 2023 obscure what we see in front of us.” Ruffer (RICA) monthly investment report for December 2023 during which NAV/share price rose 2.1%/4.2% respectively.

To optimise shareholder value
Annual Report from abrdn Diversified Income & Growth (ADIG). Chair Davina Walter had this to say: “…our Investment Manager has continued to pursue its strategy of seeking to provide income and capital appreciation over the long term from a genuinely diversified portfolio, providing access to a wide selection of asset classes, an attractive and dependable level of income and defensive characteristics relative to the volatility of equity markets. Despite the Board's confidence in the investment strategy, the persistent and entrenched discount to Net Asset Value…led the Directors to commence a strategic review in June 2023 to consider how the Company could best restore and deliver value to shareholders.” And as the Chair explains: “In the light of the feedback received and the persistent discount to net asset value…at which the Company's shares continued to trade, the Board concluded that it was in the best interests of shareholders as a whole to put forward proposals for a managed wind-down of the Company.”

As for how the fund performed over the year, the investment managers reported: “…a total NAV return of 0.4% with 3.6% volatility, a good risk adjusted return per unit of risk taken. This compared with a 13.2% return in equities as measured by the FTSE All-Share Index with 11.6% volatility, and -0.6% in government bonds as measured by the ICE BofA UK Gilt Index with a volatility of 11.5.” Back to the Chair for the outlook: “Global markets continue to be volatile, and, whilst there are some positive signs of recovery as inflation abates, the medium-term outlook for UK equity markets remains subdued, especially in terms of the investment trust sector. This is likely to continue to weigh on ADIG's valuation relative to NAV, hence the proposals we are putting forward for an orderly Managed Wind Down which seeks to optimise shareholder value.”

Comment from Winterflood: “Under the managed wind-down announced in December 2023 (subject to shareholder approval at 27 February AGM), the Board expects that £115m will be returned to shareholders in H1 2024 at, or close to, NAV. Further returns of cash will follow as value is realised from the private markets portfolio (58.4% of 30 September NAV). c.£107.3m (valuation as at 30 November 2023) of private holdings expected to mature by 2027. Remaining £81.5m expected to mature between 2029 and 3033, and opportunistic secondary sales would be considered. The fund will cease to make new investments but will fund existing commitments. Outstanding debt (£16.1m of secured bonds with 6.25% coupon maturing in 2031) will be repaid in 2024.”

Challenge of the week
“The challenge for central bankers from here is to thread the needle of holding rates high enough to keep inflationary pressures at bay and bring inflation back to target while at the same time, not tipping economies into recession. The US appears to be treading this path well, while data in the UK and Europe is suggestive of a more imminent downturn.” abrdn Diversified Income & Growth (ADIG) Investment Manager’s Report.

[essentialinvestor] 11/1/2024 12:24

Added a few.

[tiltonboy] 10/1/2024 14:29

It will be interesting to see how they manage the later tranches.

All the talk has been about the level of discount they would have to take in a "fire-sale". Perhaps now we are not forced sellers, we can enjoy some upside. It would be interesting to see what levels of growth (if any) the remaining funds are capable of.

Like you chuko I'm not particularly interested in the dividend as this is just a part of the total return.

I'm more than happy to run the 50% (ish) of the remaining portfolio, and believe the 24/7 tranche will be paid out averaging 2.2 years.

A bit more difficult to take a view on the 29/33 tranche

[hohum1] 10/1/2024 14:27

The dividend can be viewed as a cash distribution at NAV but, unless held in a suitable tax-free wrapper, you do pay tax on it. The returns of capital are treated as disposals for CGT purposes but, for many of us long term holders, CGT is not a concern. So you are right, it is largely irrelevant if they cut the dividend but for those that like a steady income the Board could continue to pay it at current levels..

[chucko1] 10/1/2024 14:04

But as an investment company enters wind down, it is generally accepted/expected that dividends may be reduced or stopped entirely, as far larger from time to time distributions are made. I will be looking at this, as with all others, merely in terms of total return (basically, an imputed IRR).

This is why I am unfussed as to the running yields of the remaining investments (in Private I and Private II) as they will not be material with respect to other parameters, in particular the estimate 40% discount that will arise from a still 82p share price post first disposal completion targeted for June 2024. (and also the continuing 7% running yield to that point).

If, as maybe a concern for others, the lower running yield following June 24 leads to a less desirable share, then that is fine also as their loss can be the gain for others, albeit with patience being the entry fee!

[speedsgh] 10/1/2024 12:14

"The Company will continue to pay its regular quarterly dividend until such time as the change of investment objective and policy is approved. Further information on the dividend policy thereafter will follow in the circular to shareholders due to be published as soon as practicable."

I am assuming that, following approval of change of investment objective/policy, the dividend will be reduced to improve earnings cover of the payout and to account for expected further reductions in earnings as assets gradually mature?