Abrdn Diversified Income... Share Discussion Threads

[skinnypope] 28/3/2024 11:25

A small note from me re the NAV "dips" in last week or so.

I'd say this is consistent with the cash going up as the liquid portfolio is realised, due to transaction costs and bid/offer slippage etc.

I had 5% costs for the liquid portfolio which is perhaps conservative, but I do note that 1p drop in NAV = £3m. The recent cash increase to £58m suggests a ~£50m liquidation. So maybe it cost ADIG £3m to raise £50m = 6% cost? I suspect this is just a coincidence!

[essentialinvestor] 26/3/2024 12:36

CC, this is one of the reasons for the % discount - uncertainty around the 'reliability' of the NAV.

[cc2014] 26/3/2024 12:27

hmm. NAV dropped nearly a penny yesterday. (0.94p)

[mandihong] 26/3/2024 08:57

The 3% may possibly have been used to pay/invest into draw requirements in existing funds. i.e. "meet outstanding commitments in respect of its private
markets portfolio (such commitments amounting to c.£38.4 million in total)"

[cc2014] 26/3/2024 07:50

Why only put 3% in liquid cash equivalents? Why not all of it?

[spectoacc] 26/3/2024 06:46

That definition to me is "cash". Perhaps ADIG are taking it literally.

[essentialinvestor] 25/3/2024 22:03

Ah, right - appreciated.

The benefit of reading diligently.

[strathroyal] 25/3/2024 21:58

This paragraph was included in the new investment objective and policy when they issued the winding up circular:

Any cash received by the Company as part of the realisation process prior to its distribution to Shareholders will be held by the Company as cash on deposit and/or in liquid cash equivalents securities (including direct investment in treasuries and/or gilts, funds holding such investments, money market or cash funds and/or short-dated corporate bonds or funds that invest in such bonds) pending its return to shareholders.

[essentialinvestor] 25/3/2024 21:50

* good point - and it can't be the bond redemption either as that's second week of April.

[spectoacc] 25/3/2024 20:22

Why has the net cash fallen from last report? Have I forgotten a large XD?

[skinnypope] 25/3/2024 19:01

@Essential - yes IRR assumes reinvestment (this is standard in the calculation).

[tiltonboy] 25/3/2024 15:22

Only tiny in the scheme of things (£1.2m) but the Majedie equity fund repaid in February.

[essentialinvestor] 25/3/2024 15:18

Skinny, are your calcs based on reinvesting the 38 pence back, or not?. Thx

I'm guessing it's in keeping all cash returns.

[skinnypope] 25/3/2024 13:41

I've not got much new commentary to add here as all the facts remain the same, and also as others have done a great job keeping this board up to date.

I have watched the NAV discount creep ever wider which, coupled with time passing, has continued to push up the IRR from my cashflow model. My inputs and assumptions are unchanged, and still somewhat conservative on liquidation costs. I see the IRR now just over 20% out to the end of 2028.

This is now above where private funds target; for example the flagship Oaktree Opportunities Fund is currently open for another tranche, with a target IRR of 16-21%

Having sat on the sidelines with my current holding, I have just bought in here.

Good luck all.

[essentialinvestor] 22/3/2024 15:27

Yes, selling in to strong markets may be supportive to cash returns. Valid observation.

[hugepants] 22/3/2024 00:29

Well they might get more if the markets rally. I'm pretty confident in the NAV. The private markets stuff is not being disposed in a fire sale but gradually over time. And the income will accrue.
Yes it's the same ballpark chucko.

[essentialinvestor] 21/3/2024 17:48

How close to the 38 pence return will they get in H1?, pretty close hopefully.

Nothing guaranteed, as always.

[chucko1] 21/3/2024 16:30

"Yes, but 46%?"

Isn't it 50% at 72.5p?

HP, perhaps, but I never said what I had assumed as a share price, nor the loss upon liquidation of initial phase assets!!

Anyway, I get 48.5% discount at a share price of 72.5p and with a zero loss upon sale. I had assumed 73p (offer) and 3% loss - as I had used when I first posted something on this board. In actual fact, I suspect it will be rather less than 3%.

[essentialinvestor] 21/3/2024 14:51

I have inserted an R in to my above post ;.

[chucko1] 21/3/2024 14:43

ABDN is a headwind, for sure. I looked at all the trades they did between November and February, so at least I can say they did nothing overly stupid. Just bought three new EM bonds in small size, totalling £1.2mn (having sold three others totalling £1.5mn).


I had estimated that the average quality of person working for ABRDN on this was not especially high, and that theory is further supported by elements within the updated portfolio presentation - with spelling mistakes and inconsistencies in the order of and naming of various assets. It suggests they either still use paper and pen, or have poor computer skills. So long as they leave the portfolio intact other than selling as and when, it cannot go too far wrong from what the pure arithmetic offers.

But it is, to remind, ABRDN. Sorry, abrdn.

[hugepants] 21/3/2024 14:43

"Yes, but 46%?"

Isn't it 50% at 72.5p?

[essentialinvestor] 21/3/2024 14:20

There 'should' also be some upside to portfolio asset values still held, from here - you would hope!!.

It is ABRDN though ;.

[essentialinvestor] 21/3/2024 14:10

Hope so, I got 7,973 shares yesterday at 71.76. And a very small amount today at 71.6.

[chucko1] 21/3/2024 14:03

Yes, but 46%? Include also the income to cone, which appears to be pretty stable. In fact, of late, the NAV has been more stable and I imagine the liquid portfolio is being sold and we will see an increase to the net negative leverage (i.e. cash!) in short order.