Abrdn Diversified Income... Share Discussion Threads

[neilyb675] 19/2/2024 14:45:52

77.00 - 78.00 (GBX) at 11:22:30
on Market (LSE)

[essentialinvestor] 19/2/2024 11:47:48

* thanks for the clarification, appreciated.

Db possiblity touching last November's low?.

[skinnypope] 17/2/2024 12:11:24

Ah right, there’s the difference.

The “including income” measure that I use is, I believe, much more accurate. It will capture the likes of imminent dividends.

The “excluding income” will ignore those dividends, but will reflect the ex-dividend price of the stocks.

[Once the dividends are paid they will hit the cash line and both NAVs will come back more in line]

[essentialinvestor] 16/2/2024 18:36:43

29/12/23 RNS - abrdn Diversified Income and Growth plc Undiluted Excluding Income 111.33p Ordinary

From today, on the same basis, 107.62p.

[skinnypope] 16/2/2024 17:15:12

@EI – I can’t see the NAV has dropped 4% since year end?

31Dec NAV = 111.01
16Feb NAV = 109.15

Change = (1.7) %

I downloaded the new portfolio disclosure report, which wasn’t overly informative. Bond NAVs slightly improved, private assets small lower, and also equities lower.

Equities driven partly through net sales – they sold AERS and bought [less] JLEN, but also partly through market moves -there is a niggly 824k of GRID in the book, which took quite a hit to the end of Jan.

Re the NAV discount widening post any distribution, I think this is mathematically probable, but also not really relevant.

The remaining private assets will be the ones mostly contributing to the NAV discount, so indeed after the sale of the liquid assets (presumably valued only at a slight discount to NAV), then the remaining total NAV discount is spread over less assets = NAV discount % mechanically widens.

But it doesn’t matter as it’s already in the price. Putting some rough numbers out here:

Total portfolio value = £333m
Total market cap = £238m

To reconcile those numbers, I have to put the listed equities/bonds/credit assets to 5% discount, and the private assets to a whopping 45% discount [cash / forward contracts / debt at FV all largely offset]

In other words, post the liquid asset sales the NAV discount can go to 45%, but that’s where they are already valued, so it all nets off.

The real value in ADIG is that the discount on the Trance 1 private assets is too wide, given that they will just roll off at par. In fact, putting these assets to zero discount, means the Tranche 2 assets are kinda valued at zero!

[chucko1] 16/2/2024 17:14:07

I bought a few when the wind down decision was made. Given the perpetual fall (it seems) in NAV and there is no attribution to the factors causing it, I see the safest route as one of averaging in.

That said, it is clear that a factor of note would be the medium term risk free rate which has risen somewhat the past weeks in line with an NAV fall of about 3%. We know that they have some holding of fixed income instruments and more recently, the gilt fund. However, this by no means explains more than a mere portion of the fall.

As I had previously noted, I could see no comments in their publications on any hedging strategy being employed, so what is happening to the currency exposure is guesswork. Or general interest rate risk.

But yes, a possible 30-45% discount covers up many sins in a wind down.

[hugepants] 16/2/2024 16:26:36

tilton, I thought I read somewhere in the circular that the number of shares in issue will stay the same? Perhaps I misread.
I know what you mean but IMO the discount has to narrow from here as we approach capital repayment date.

[tiltonboy] 16/2/2024 16:21:50

Deleted post after re-reading. Apologies HP

[hugepants] 16/2/2024 16:13:30

less than 2% surely?

[essentialinvestor] 16/2/2024 16:09:37

Just looking at the 31/12/23 NAV,
it's fallen not far off 4% in just 6/7 weeks.

[essentialinvestor] 16/2/2024 16:06:31

* provided NAV does not decline further..

[hugepants] 16/2/2024 16:03:08

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 13:25:10

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 11:07:31

* on the NAV discount Not widening post capital return.

[hugepants] 15/2/2024 22:15:12

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

[essentialinvestor] 15/2/2024 22:05:15

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

[hugepants] 15/2/2024 22:02:47

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 22:00:49

NAV spprox 5% lower on the last 6 months.

[hugepants] 15/2/2024 21:58:43

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 21:56:32

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 21:50:23

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 15:11:33

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

[tiltonboy] 15/2/2024 14:43:06

EGM on 20th. Get your votes in

[essentialinvestor] 15/2/2024 13:27:59

Ok, appreciate the view, thanks.

[chucko1] 15/2/2024 12:37:43

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.