Following shareholder approval of the managed wind-down strategy in February 2024, abrdn Diversified Income and Growth (ADIG) sold substantially all of its public market assets and returned approximately £115m to shareholders by way of a B share scheme in July 2024 (being approximately 38.1 pence per ordinary share, which represented approximately 35.4% of the company’s prevailing net asset value at the time). Subsequent to this initial return of capital, the board and its advisers have continued to explore the available options to conduct an orderly realisation of the company’s remaining assets in a manner that seeks to optimise value whilst progressively returning cash to shareholders. In doing so, the board has been particularly conscious of the expected timelines for the natural maturity of the two tranches of the company’s private markets portfolio (with the first tranche expected to mature between 2025 and 2027 and the second tranche expected to mature between 2029 and 2033).
In particular, the board has been considering the opportunities available for secondary sales of private market assets. Although the market for secondary sales of private assets has in general improved recently, liquidity remains very selective and focused on the most attractive sectors. Accordingly, the board believes there remain challenges in achieving secondary liquidity and attractive pricing for the company’s less liquid investments.
However, the board confirms that it is in early-stage discussions, on an exclusive and confidential basis, with a third party regarding a potential transaction in relation to all or substantially all of the remaining portfolio. This third party is currently undertaking a due diligence exercise in respect of the portfolio, and the board will provide further updates, as appropriate, in due course. At present, there is no guarantee that the terms of any proposal would be sufficiently attractive to merit a board recommendation or that such discussions will lead to definitive agreements for such a transaction.
The terms of any proposed transaction would need to be assessed against the likely return to shareholders that could be delivered through the other strategic options available to the company. This assessment would take into account, among other things, the quantum delivered to shareholders (on a net present value basis), timing, and relative certainty of execution. The board, together with its advisers, therefore continues to consider each of these alternative options alongside the aforementioned third-party discussions.
ADIG: abrdn Diversified Income and Growth provides update on managed wind-down
