Aberdeen Diversified Income and Growth to increase focus on private market investments

Aberdeen Diversified Income and Growth (ADIG) announced that following a strategic review, it has been agreed with the manager that a greater focus should be given to the company’s allocation to private market investments.  It has been agreed that Nalaka De Silva, Aberdeen Standard Investments’ head of private markets solutions, will assume oversight of the company’s portfolio asset allocations as manager and chair of the ADIG investment committee.

In the announcement this morning to its holders of its £60m 6.25% Bonds, ADIG also noted that it has agreed terms with a holder of the bonds to repurchase £37m in aggregate principal amount of the bonds. The following benefits from pursuing the repurchase were disclosed:

  • “Reducing leverage: overall gearing on a fair value basis is expected to fall from approximately 24% to 6%. The repurchase retires a substantial portion of expensive debt in a low-interest rate and volatile environment;
  • Increasing cash flow: the repurchase will immediately reduce the interest cost payable by the company by up to £2.8 million per annum, assuming repurchase of the full offer amount, supporting the intention to have a progressive dividend programme;
  • Increased capital management flexibility: the repurchase provides the company more flexibility in respect of discount management, including share buybacks.”

Board committed to a progressive dividend policy

ADIG also noted that “a major component of the proposition to investors is offering a dependable and regular dividend. The board is committed to a progressive dividend policy and confirms, as part of the strategic review, its intention to continue to pay the current level of dividend. Furthermore, during the period when private markets investments move towards distribution paying ability, the board is prepared to utilise the substantial revenue reserves that have been built up by the company over many years to support the dividend policy.”

ADIG: Aberdeen Diversified Income and Growth to increase focus on private market investments

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