REG - abrdn Diversfd. I&G - Half-Yearly Financial Report
06/06/2025 07:00
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RNS Number : 6832L abrdn Diversified Income and Growth 06 June 2025
abrdn Diversified Income and Growth plc
LEI - 2138003QINEGCHYGW702
Half Yearly Report 31 March 2025
abrdndiversified.co.uk
Investment Objective
The Company's investment objective is to conduct an orderly realisation of its assets in a manner that seeks to optimise the value of the Company's investments whilst progressively returning cash to shareholders in a timely manner.
Financial Highlights
Financial Highlights
31 March 2025 30 September 2024 % change
Total shareholders' funds (Net Assets) £206,138,000 £203,306,000 +1.4
Ordinary share price (mid market) 48.10p 44.50p +8.1
Net asset value per Ordinary share 68.42p 67.48p +1.4
Discount to net asset value on Ordinary shares (A) 29.7% 34.1%
(A) Considered to be an Alternative Performance Measure.
Chairman's Statement
Performance
Over the six months ended 31 March 2025, the Company's net asset value ("NAV")
per share total return (including dividends) was 4.4%.
Dividends and distributions
During the six months ended 31 March 2025, shareholders received 1.95 pence
per share on 24 October 2024 (with an ex dividend date of 26 September 2024
and a record date of 27 September 2024) while the Company's share price rose
to 48.10p (30 September 2024 - 44.50p).
It is important for shareholders to note that the Company's capacity for
revenue generation substantially decreased following the sale of the public
markets assets and will reduce further as the private markets' assets are
realised and capital is returned to shareholders. It is expected that, as a
minimum, the Company will declare a dividend each September, normally payable
in October, to maintain investment trust status.
The Board and its advisers will continue to explore options for returning cash
to shareholders in a timely and tax-efficient manner, in line with the Managed
Wind-Down strategy approved by shareholders in February 2024, as investments
are realised and the value of the Company's undrawn commitments to existing
investments reduces.
Market update
Over the past six months, the global economic landscape has been marked by
significant geopolitical and economic shifts. This has been dominated by
policy change in the United States where President Trump is seeking to
challenge long-established trading agreements and introduce higher tariffs for
some key trading partners as was proposed in March 2025 before a full scale
tariff announcement on "Liberation Day" at the start of April.
These moves have introduced significant uncertainty into the global economy
and raised the prospect of slowing economic growth and increased trade
friction, most notably between China and the U.S. The U.S. Federal Reserve
held interest rates steady at 4.50% for a third consecutive meeting in May
2025 in line with expectations as officials adopted a wait-and-see approach
amid concerns that President Trump's tariffs could drive up inflation and slow
economic growth. Policymakers noted that uncertainty about the economic
outlook had increased further and that the risks of higher unemployment and
higher inflation had risen.
China announced an aggressive fiscal expansion in 2025, including record debt
issuance and strategic investments to maintain a 5% GDP growth target.
Inflationary pressures persisted globally, with headline inflation rising in
many countries, posing challenges for central banks trying to balance growth
and inflation.
In the UK, the new Labour government focused on resetting relations with the
EU, aiming to reduce trade barriers and enhance security cooperation. The
Spring Statement in March 2025 announced fiscal measures, including increased
public spending and tax reforms, seeking to support economic growth. In May
the outline of a new trade agreement with the US and consequential reduced
tariffs was announced following quickly on from an historic free trade
agreement between the UK and India. Meanwhile, the Bank of England reduced UK
interest rates by a quarter point to 4.25% and the European Central Bank
continued its gradual easing of monetary policy, reducing interest rates to
support economic recovery and manage inflation.
The private markets space is navigating a complex landscape due to the recent
U.S. tariff announcements, which have introduced significant uncertainty and
affected valuations and exit strategies. The already-fragile European economy
is facing a significant negative demand shock from US tariffs, specifically
Germany is heavily exposed. European and German fiscal policy is set to ease
significantly. EU defence spending will increase up to €800bn (5% GDP), and
Germany has announced a plan to spend €500bn on infrastructure (12% of GDP).
Some retaliation is possible, but the overall impact is likely to be
disinflationary.
Private equity firms are extending due diligence periods and incorporating
more flexible deal structures to mitigate risks from the US tariffs. Despite
these challenges, there is cautious optimism within the industry with
expectations that private equity activity in 2025 may sustain its recent
activity level and exceed that of 2024. Private debt continues to expand
globally, and infrastructure investments, particularly in AI-related data
centres and power, are accelerating. Real estate valuations appear to be
nearing the bottom, presenting opportunities for recovery. Overall, private
markets are poised for growth, with higher investment activity and greater
demand for long-term capital, underscoring the sector's resilience amid
geopolitical and economic shifts.
Portfolio update
As at 31 March 2025, the Company reported a NAV of £206.1 million, comprising
the investment portfolio of £171.4 million and net current assets of £34.8
million. Unfunded commitments stood at £21.4m.
During the six months ended 31 March 2025, the portfolio benefited from three
full redemptions and two partial redemptions. Mount Row II, Markel CATCo
Reinsurance Opportunities Fund, and HarbourVest International Private Equity V
were fully redeemed and liquidated for a total of £10.3 million. Partial
redemptions included £4.9 million from the Aberdeen Global Private Markets
Fund and £5.2m (58% redemption) from the PIMCO Private Income Fund.
The portfolio performance over the period was characterised by notable gains
in several asset classes, with Private Equity leading the way.
Private Equity - Private Equity contributed significantly to performance,
adding +1.8%. Key positive drivers included:
· Truenoord: +0.9%
· Patria Secondary Opportunities IV: +0.6%
· Bonaccord: +0.3%
Diversifying Opportunities - Diversifying Opportunities added +0.9%, supported
by positive movements in:
· Aberdeen Global Private Markets fund: +0.5%
· Private Litigation Finance investment in Burford: +0.3%
· Healthcare Royalties: +0.1%
Defensive Assets - Defensive Assets added +0.2%, reflecting returns from cash
holdings invested in money market short-term instruments.
Private Credit - Private Credit added +0.4% within the Higher Yielding Fixed
Income allocation, driven by:
· Return of capital from Mount Row II and PIMCO Private Income
· Hark III remained flat over the period.
Real Assets - Real Assets detracted -0.1%, as gains in:
· Private Infrastructure: +1.3%
were offset by a fall in:
· Private Real Estate: -1.4%
Foreign Exchange
Foreign Exchange was a notable contributor, adding +2.0% to overall returns,
reflecting favourable currency movements over the period.
Managed Wind-Down update
Further to the Company's announcement on 16 April 2025, the Board has
appointed Campbell Lutyens as an independent broker to market the Company's
remaining portfolio of private market assets pursuant to a secondary sales
process.
Following careful consideration of the various strategic options available to
the Company in respect of its Managed Wind-Down, the Board concluded that a
secondary sales process offers the best opportunity to optimise the value of
the Company's investments whilst progressively returning cash to shareholders
in a timely manner. In reaching this conclusion, the Board was particularly
mindful of the expected timeline for the natural maturity of the Company's
private markets portfolio (which is expected to occur between 2025 and 2033).
In addition to generating opportunities for timely liquidity from the
Company's portfolio, the appointment of Campbell Lutyens and commencement of
the secondary sales process will enable the Company to market-test demand for
its assets. Given the diversified nature of the Company's remaining portfolio,
it is unlikely that any one buyer will be found for the entire portfolio and
therefore the process is expected to involve sales to multiple interested
parties. The Company is liaising with the underlying general partners of its
investments with a view to commencing the marketing in the coming weeks.
Once indicative pricing has been obtained (which, for the avoidance of doubt,
the Board and its advisers still expect to be at a material discount to the
underlying net asset values), the ultimate decision whether to proceed with
any given secondary sale will remain with the Board, which (together with its
advisers) will assess the pricing against the quantum and likelihood of
near-term returns expected from the relevant assets. Returns to shareholders
will also be optimised through the Company continuing to exercise near-term
redemption mechanics within the underlying fund documentation where available.
As announced on 26 February 2025 (the day of the AGM), the Company was
previously in exclusive and confidential discussions with a third party
regarding a potential transaction in relation to all or substantially all of
the remaining portfolio. The consideration was principally payable in listed
shares plus a cash element. The Board initially considered the third party
offer to be credible and worthwhile for the Company to explore given the
relative certainty and deliverability that a sale of the entire portfolio
would provide for shareholders (avoiding the risks and costs of a protracted
managed wind-down process) and the indicative pricing range in the initial
offer letter. However, after careful consideration of the final terms of the
offer, and the alternative options available to the Company, the Board
resolved not to proceed with the third party offer as it did not consider the
terms to be sufficiently attractive to merit a Board recommendation. In
particular, both elements of the consideration would have been at a discount
which the Board believed would be lower than the price that could be achieved
through a secondary market sale, whilst the share element would also leave
shareholders exposed to current market volatility and potential liquidity
issues.
Since shareholders approved the Managed Wind-Down in February 2024, the Board
has continued to assess all options on the basis of, among other things, the
quantum expected to be delivered to shareholders (on a net present value
basis), timing, relative certainty of execution and the nature of the
consideration. Whilst it was not able to recommend the third party offer, the
Board believes that proceeding with the open-market sales process should
provide shareholders with more certainty than a managed wind-down process over
a longer time period.
Whilst secondary sales are still being transacted at discounts to carrying
value, the Board also notes recent improvements in secondary market conditions
(notwithstanding the current macroeconomic volatility), with secondary
fundraising momentum supporting demand. By way of background, Campbell Lutyens
has strong market knowledge and experience (including in respect of private
equity, private credit and infrastructure) and has shown enthusiasm to support
the Company during its Managed Wind-Down. At 31 March 2025, Campbell Lutyens
had over 60 professionals dedicated to the secondaries market and had advised
on more than $135 billion in transaction volume across over 350 secondary
portfolio sales and advisory mandates.
While the Board and Campbell Lutyens intend to obtain indicative pricing from
potential purchasers over the coming months, there can be no certainty as to
the precise quantum or timing for the completion of any realisations or
returns of capital arising out of the secondary sales process at this time. In
particular, the process is not guaranteed to result in a complete solution in
respect of the Company's entire portfolio (with there being a risk that the
Company may not be able to find buyers for all of its investments at
sufficiently attractive prices).
The Company remains committed to returning the net proceeds of any
realisations to shareholders progressively in an efficient and fair manner
(which accounts for, among other things, the UK tax consequences for
shareholders and the composition of the Company's shareholder register). In
particular, following Court approval confirming the cancellation of the amount
standing to the credit of its capital redemption reserve on 28 March 2025, the
Company is well-placed to continue returning cash to shareholders
progressively, by way of its B share scheme, during the secondary sales
process (subject to consideration of the Company's liabilities, any remaining
undrawn fund commitments and general working capital requirements) and will
look to do so in a cost-effective manner.
Davina Walter
Chairman
5 June 2025
Interim Management Report and Directors' Responsibility Statement
The Chairman's Statement provides details of the important events which have
occurred during the period and their impact on the financial statements.
Principal Risks and Uncertainties
The principal risks faced by the Company can be divided into various areas as
follows:
· Performance risk;
· Regulatory risk;
· Operational risk;
· Market risk; and
· Financial risks.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Financial Statements for the year ended 30
September 2024 (the "Annual Report"); a detailed explanation can be found in
the Strategic Report on pages 9 and 10 of the Annual Report which is available
on the Company's website: abrdndiversified.co.uk
The Board is monitoring the heightened geopolitical risks in the form of the
Russian invasion of Ukraine, conflict in the Middle East, recent and rising
tension between China and Taiwan as well as more recent hostilities between
Pakistan and India over Kashmir.
The Board is also conscious of the elevated threat posed by climate change and
continues to monitor, through its Investment Manager, the potential risk that
its portfolio investments may fail to adapt to the requirements imposed by
climate change.
In the view of the Board, there have not been any other changes to the
fundamental nature of the principal risks and uncertainties facing the Company
since the previous Annual Report, which are considered to be equally
applicable to the remaining six months of the financial year to 30 September
2025.
Going Concern
The Financial Statements of the Company have been prepared on a going concern
basis. The Directors have assessed the financial position of the Company as
outlined above and in the Chairman's Statement and on the basis more fully set
out in the accounting policies in Note 1 to the Financial Statements.
The forecast projections and actual performance have been reviewed on a
regular basis throughout the period and the Directors believe that the going
concern basis remains appropriate as the Company is financially sound with
adequate resources to continue in operational existence for the foreseeable
future (being a period of twelve months from the date that these financial
statements were approved). The Company is able to meet all of its liabilities
from its assets, including its ongoing operating expenses.
Related Party Disclosures and Transactions with the Alternative Investment Fund Manager and Investment Manager
abrdn Fund Managers Limited ("AFML") has been appointed as the Company's
alternative investment fund manager.
AFML has (with the Company's consent) delegated certain portfolio and risk
management services, and other ancillary services, to abrdn Investments
Limited and abrdn Holdings Limited, which are regarded as related parties
under the UK Listing Rules issued by the Financial Conduct Authority ("FCA").
Details of the fees payable to AFML are set out in note 3 to the condensed
financial statements.
Directors' Responsibility Statement
The Disclosure Guidance and Transparency Rules of the UK Listing Authority
require the Directors to confirm their responsibilities in relation to the
preparation and publication of the Interim Management Report and Financial
Statements.
The Directors confirm to the best of their knowledge that:
· the condensed set of financial statements contained within the Half
Yearly Financial Report has been prepared in accordance with applicable UK
Accounting Standard FRS 104 'Interim Financial Reporting' and give a true and
fair view of the assets, liabilities, financial position and return of the
Company for the period ended 31 March 2025; and
· the Interim Management Report, together with the Chairman's Statement and
Investment Manager's Report, include a fair review of the information required
by 4.2.7R and 4.2.8R of the FCA's Disclosure Guidance and Transparency Rules.
The Half-Yearly Financial Report was approved by the Board and the above
Directors' Responsibility Statement was signed on its behalf by the Chairman.
For and on behalf of the Board
Davina Walter
Chairman
5 June 2025
Ten Largest Investments
As at 31 March 2025
At At
31 March 30 September
2025 2024
% of Total % of Total
investments investments
SL Capital Infrastructure II(AB) 16.6 15.2
European economic infrastructure
Andean Social Infrastructure Fund I(AB) 12.7 8.7
Infrastructure project investments in the Andean region of South America
Bonaccord Capital Partners I-A(B) 10.9 10.0
Investments in alternative asset management companies
Patria Secondaries Opportunities Fund IV(B) 10.7 8.8
Diversified Private Equity portfolio which invests through secondary
transactions
Burford Opportunity Fund(B) 9.8 8.9
Litigation finance investments initiated by Burford Capital
Aberdeen Standard Global Private Markets Fund(AB) 9.8 11.4
Multi-strategy private markets exposure
Healthcare Royalty Partners IV(B) 6.8 6.8
Healthcare royalty streams primarily in the US
TrueNoord Co-Investment(B) 5.5 3.9
Aircraft leasing company which specialised in regional aircraft
BlackRock Renewable Income - UK(B) 3.7 3.7
Invests in renewable power infrastructure projects in the United Kingdom
Aberdeen Property Secondaries Partners II(AB) 3.5 4.3
Real estate portfolio of properties across United Kingdom and Europe
(A) Denotes Aberdeen Group plc managed products.
(B) Unlisted holdings.
Investment Portfolio - Private Markets
As at 31 March 2025
Valuation Valuation Valuation
31 March 2025 31 March 2025 30 September 2024
Company £'000 % £'000
Private Equity
Bonaccord Capital Partners I-A(B) 18,711 10.9 18,130
Patria Secondaries Opportunities Fund IV(B) 18,370 10.7 16,057
TrueNoord Co-Investment(B) 9,324 5.5 7,136
Maj Invest Equity V(B) 2,121 1.3 2,095
HarbourVest International Private Equity VI(B) 888 0.5 1,240
Mesirow Financial Private Equity IV(B) 383 0.2 400
HarbourVest VIII Venture Fund(B) 98 0.1 104
Mesirow Financial Private Equity III(B) 63 - 80
Maj Invest Equity IV(B) 23 - 24
HarbourVest VIII Buyout Fund(B) 14 - 23
Top ten holdings 49,995 29.2
Other holdings 4 -
Total Private Equity 49,999 29.2
Real Estate
Aberdeen Property Secondaries Partners II(AB) 5,976 3.5 7,840
Cheyne Social Property Impact Fund(B) 3,363 1.9 3,299
Aberdeen European Residential Opportunities Fund (AB) - - 2,556
Total Real Estate 9,339 5.4
Infrastructure
SL Capital Infrastructure II(AB) 28,441 16.6 27,792
Andean Social Infrastructure Fund I(AB) 21,816 12.7 15,821
BlackRock Renewable Income - UK(B) 6,358 3.7 6,657
Aberdeen Global Infrastructure Partners II (AUD)(AB) 2,081 1.2 2,250
Pan European Infrastructure Fund(B) 761 0.5 768
Total Infrastructure 59,457 34.7
Private Credit
ASI Hark III(B) 4,053 2.4 4,109
PIMCO Private Income Fund Offshore Feeder I LP(B) 2,947 1.7 6,736
Mount Row Credit Fund II(B) 309 0.2 9,393
Total Private Credit 7,309 4.3
Other
Burford Opportunity Fund(B) 16,794 9.8 16,120
Aberdeen Standard Global Private Markets Fund(AB) 16,749 9.8 20,730
Healthcare Royalty Partners IV(B) 11,759 6.8 12,263
Total Other 45,302 26.4
Total Private Markets 171,406 100.0
(A) Denotes Aberdeen Group plc managed products.
(B) Unlisted holdings.
Investment Portfolio - Equities
As at 31 March 2025
Valuation Valuation Valuation
31 March 2025 31 March 2025 30 September 2024
Company £'000 % £'000
Reinsurance Sub-Fund
CATCo Reinsurance Opportunities Fund 5 - 79
Total Reinsurance Sub-Fund 5 -
Total Equities 5 -
Investment Portfolio - Net Assets Summary
As at 31 March 2025
Valuation Net assets Valuation Net assets
31 March 2025 31 March 2025 30 September 2024 30 September 2024
£'000 % £'000 %
Total investments 171,411 83.1 182,525 89.8
Cash and cash equivalents 34,828 16.9 22,300 11.0
Other net liabilities (101) (0.0) (1,519) (0.8)
Net assets 206,138 100.0 203,306 100.0
Condensed Statement of Comprehensive Income (unaudited)
Six months ended Six months ended
31 March 2025 31 March 2024
Revenue Capital Total Revenue Capital Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments - 6,787 6,787 - (7,184) (7,184)
Foreign exchange gains - 196 196 - 5,720 5,720
Income 2 2,659 - 2,659 7,399 - 7,399
Investment management fees 3 (27) (243) (270) (267) (267) (534)
Administrative expenses (355) (41) (396) (572) (159) (731)
Net return/(loss) before finance costs and taxation 2,277 6,699 8,976 6,560 (1,890) 4,670
Finance costs - (1) (1) (262) (3,021) (3,283)
Net return/(loss) before taxation 2,277 6,698 8,975 6,298 (4,911) 1,387
Taxation 4 (268) - (268) (1,097) (37) (1,134)
Return/(loss) attributable to equity shareholders 2,009 6,698 8,707 5,201 (4,948) 253
Return/(loss) per Ordinary share (pence) 5 0.67 2.22 2.89 1.73 (1.65) 0.08
The total column of the Condensed Statement of Comprehensive Income is the
profit and loss account of the Company. There has been no other comprehensive
income during the period, accordingly, the return/(loss) attributable to
equity shareholders is equivalent to the total comprehensive income/(loss) for
the period.
All revenue and capital items in the above statement derive from continuing
operations.
The accompanying notes are an integral part of these condensed financial
statements.
Condensed Statement of Financial Position (unaudited)
As at As at
31 March 2025 30 September 2024
(unaudited) (audited)
Notes £'000 £'000
Non-current assets
Investments at fair value through profit or loss 171,411 182,525
171,411 182,525
Current assets
Other debtors and receivables 636 633
Cash and cash equivalents 34,828 22,300
35,464 22,933
Creditors: amounts falling due within one year
Other payables (737) (2,152)
(737) (2,152)
Net current assets 34,727 20,781
Total assets less current liabilities 206,138 203,306
Net assets 206,138 203,306
Capital and reserves
Called up share capital 9 3,238 3,238
Capital redemption reserve - 114,768
Special distributable reserve 116,531 1,763
Capital reserve 61,847 55,149
Revenue reserve 24,522 28,388
Total shareholders' funds 206,138 203,306
Net asset value per Ordinary share (pence) 10 68.42 67.48
The accompanying notes are an integral part of these condensed financial
statements.
Condensed Statement of Changes in Equity (unaudited)
Six months ended 31 March 2025
Share Capital Special
Share premium redemption distributable Capital Revenue
capital account reserve reserve reserve reserve Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 October 2024 3,238 - 114,768 1,763 55,149 28,388 203,306
Return after taxation - - - - 6,698 2,009 8,707
Cancellation of Capital Redemption Reserve - - (114,768) 114,768 - - -
Dividends paid 6 - - - - - (5,875) (5,875)
At 31 March 2025 3,238 - - 116,531 61,847 24,522 206,138
Six months ended 31 March 2024
Share Capital Special
Share premium redemption distributable Capital Revenue
capital account reserve reserve reserve reserve Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 October 2023 80,938 116,556 37,043 - 69,717 35,280 339,534
(Loss)/return after taxation - - - - (4,948) 5,201 253
Dividends paid 6 - - - - - (17,805) (17,805)
At 31 March 2024 80,938 116,556 37,043 - 64,769 22,676 321,982
The accompanying notes are an integral part of these condensed financial
statements.
Condensed Statement of Cash Flows (unaudited)
Six months ended Six months ended
31 March 2025 31 March 2024
Note £'000 £'000
Operating activities
Net return before finance costs and taxation 8,976 4,670
Adjustments for:
Dividend income - (2,869)
Distribution income (2,179) (3,092)
Fixed interest income - (1,035)
Interest income (477) (259)
Other income (3) (6)
Dividends received - 2,959
Distributions received 2,179 3,092
Fixed interest income received - 1,514
Interest received 451 207
Other income received 3 6
Gains on forward contracts - (6,462)
Foreign exchange losses 33 71
(Gains)/losses on investments (6,804) 7,184
Decrease/(increase) in other debtors 40 (2)
Decrease in accruals (113) (236)
Corporation tax paid (1,800) (873)
Taxation released 230 17
Net cash flow from operating activities 536 4,886
Investing activities
Purchases of investments and capital calls (7,783) (77,128)
Realised gains on investee distributions 22,874 3,653
Sales of investments and return of capital 2,810 126,043
Net cash flow from investing activities 17,901 52,568
Financing activities
Interest paid (1) (507)
Equity dividends paid 6 (5,875) (17,805)
Net cash flow used in financing activities (5,876) (18,312)
Increase in cash and cash equivalents 12,561 39,142
Analysis of changes in cash and cash equivalents during the period
Opening balance 22,300 21,025
Foreign exchange (33) (71)
Increase in cash and cash equivalents as above 12,561 39,142
Closing balance 34,828 60,096
Represented by:
Money market funds 30,893 11,826
Cash at bank and in hand 3,935 48,270
Closing balance 34,828 60,096
The accompanying notes are an integral part of these condensed financial
statements.
Notes to the Financial Statements
For the year ended 31 March 2025
1. Accounting policies - Basis of accounting
The condensed financial statements have been prepared in accordance with
Financial Reporting Standard 104 (Interim Financial Reporting) and with the
Statement of Recommended Practice for 'Financial Statements of Investment
Trust Companies and Venture Capital Trusts' issued in July 2022 and with the
Disclosure Guidance Transparency Rules issued by the Financial Conduct
Authority.
Taking into account the Company's debt-free position, working capital
requirements and level of retained cash necessary to meet future capital and
dividend commitments, the Directors are satisfied that the Company is able to
meet all of its liabilities from its assets, including ongoing charges,
possesses sufficient resources to continue in operational existence for the
foreseeable future and at least 12 months from the date of approval of this
Report. The condensed financial statements have also been prepared on the
assumption that approval as an investment trust will continue to be granted by
HMRC. Annual financial statements are prepared under Financial Reporting
Standard 102.
In accordance with the SORP guidance, the Directors note that the timing of
the realisation of the Company's investments remains uncertain and indicates
the existence of a material uncertainty which may cast significant doubt about
the Company's ability to continue as a going concern. The Company's financial
statements do not include the adjustments that would result if the Company was
unable to continue as a going concern, such as a liquidation provision or
potential adjustments to carrying values of investments relating to their
realisation in due course.
In the context of the Managed Wind Down the Directors further announced on 16
April 2025 their intention to appoint Campbell Lutyens as an independent
broker to market the Company's remaining Private Market investment portfolio
by way of a secondary sales process, in order to generate opportunities for
timely liquidity of the portfolio and market-test demand for its assets. There
is no certainty as to the timing or level of realisation that this process
may yield but based on current expectations, whilst recognising that there is
a material uncertainty over whether the Company will be in existence in its
current form 12 months from the date of signing these financial statements,
the Directors believe that adopting a going concern basis of accounting
remains appropriate and continue to hold the investment portfolio at fair
value, consistent with the accounting policy used in the preceding audited
annual financial statements.
The interim financial statements have been prepared using the same accounting
policies as the preceding annual financial statements. There have been no new
standards, amendments or interpretations, specific to the Company, effective
for the first time for this interim period that require a change in accounting
policies.
Significant accounting judgements, estimates and assumptions. The preparation
of financial statements requires the use of certain significant accounting
judgements, estimates and assumptions which requires Directors to exercise
their judgement in the process of applying the accounting policies. The area
where judgements, estimates and assumptions have the most significant effect
on the amounts recognised in the financial statements are the determination of
the fair value of unlisted investments (Level 3 assets in the Fair Value
Hierarchy table in note 12).
2. Income
Six months ended Six months ended
31 March 2025 31 March 2024
£'000 £'000
Income from investments
UK listed dividends - 474
Overseas listed dividends - 2,395
Unquoted Limited Partnership income 2,179 3,092
Treasury bill income - 138
Fixed interest income - 1,035
2,179 7,134
Other income
Deposit interest 4 71
Interest from money market funds 473 188
Other income 3 6
Total income 2,659 7,399
3. Investment management fees
Six months ended Six months ended
31 March 2025 31 March 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment management fee 27 243 270 267 267 534
The investment management fee has been levied by abrdn Fund Managers Limited
("AFML") at the following tiered levels:
- 0.50% per annum in respect of the first £300 million of the net asset value
(with the 6.25% Bonds 2031 at fair value in the prior year); and
- 0.45% per annum in respect of the balance of the net asset value (with the
6.25% Bonds 2031 at fair value in the prior year).
With effect from 1 October 2024, management fees are allocated 90% to capital
and 10% to revenue, reflecting the anticipated split of investment returns
during the Managed Wind-Down of the Company (previously allocated 50% capital
and 50% revenue).
The Company also receives rebates in respect of underlying investments in
other funds managed by Aberdeen (the Group) (where an investment management
fee is charged by the Group on that fund) in the normal course of business to
ensure that no double counting occurs. Any investments made in funds managed
by the Manager which themselves invest directly into alternative investments
including, but not limited to, infrastructure and property are charged at the
Manager's lowest institutional fee rate. To avoid double charging, such
investments are excluded from the overall management fee calculation. For
further information see note 13 to the consolidated financial statements.
At the period end, an amount of £92,000 (31 March 2024 - £174,000) was
outstanding in respect of management fees due by the Company.
4. Taxation
The taxation charge for the period represents withholding tax refunded and
corporation tax paid.
The Company has not recognised a deferred tax asset (2024 - £nil) as it is
considered unlikely that sufficient taxable profits will be generated in the
future to utilise these amounts and therefore no deferred tax asset has been
recognised.
The Company does not apply the marginal method of allocation of tax relief.
5. Return per Ordinary share
Six months ended Six months ended
31 March 2025 31 March 2024
p p
Revenue return 0.67 1.73
Capital return/(loss) 2.22 (1.65)
Total return 2.89 0.08
The figures above are based on the following:
Six months ended Six months ended
31 March 2025 31 March 2024
£'000 £'000
Revenue return 2,009 5,201
Capital return/(loss) 6,698 (4,948)
Total return 8,707 253
Weighted average number of shares in issue(A) 301,265,952 301,265,952
(A) Calculated excluding shares held in treasury.
6. Dividends
Six months ended Six months ended
31 March 2025 31 March 2024
£'000 £'000
Second interim dividend for 2024 - 1.95p 5,875 -
Third interim dividend for 2024 - nil (2023 - 1.42p) - 4,278
Special dividend for 2024 - nil (2023 - 1.65p) - 4,971
Fourth interim dividend for 2024 - nil (2023 - 1.42p) - 4,278
First interim dividend for 2025 - nil (2024 - 1.42p) - 4,278
5,875 17,805
On 16 September 2024, the Board declared a second interim dividend of 1.95
pence per share which was paid on 24 October 2024 to shareholders on the
register on 26 September 2024.
From the adoption of the Managed Wind-Down investment policy, dividends will
be paid only to ensure that the Company continues to maintain its investment
trust status.
7. 6.25% Bonds 2031
Six months ended Year ended
31 March 2025 30 September 2024
£'000 £'000
Balance at beginning of period - 15,730
Amortisation of discount and issue expenses - 19
Loss on early repayment - 2,759
Repayment - (18,508)
Balance at end of period - -
On 9 April 2024, the 6.25% Bonds were repaid early at a price of 114.983%,
resulting in a total cost of £18,587,000, including accrued interest of
£79,000 thereon.
8. Analysis of changes in net cash/(debt)
At Non-cash At
1 October 2024 Cash flows movements 31 March 2025
£000 £000 £000 £000
Cash and cash equivalents 22,300 12,528 - 34,828
Total 22,300 12,528 - 34,828
At Non-cash At
1 October 2023 Cash flows movements 30 September 2024
£000 £000 £000 £000
Cash and cash equivalents 21,025 1,275 - 22,300
Debt due after one year (15,730) 18,508 (2,778) -
Total 5,295 19,783 (2,778) 22,300
Cash equivalents are held in a money market fund.
9. Called up share capital
At the end of the period there were 301,265,952 (30 September 2024 -
301,265,952) Ordinary shares in issue and 22,485,854 (30 September 2024 -
22,485,854) shares held in treasury. During the period no Ordinary shares of
25p each were purchased (year ended 30 September 2024 - nil).
10. Net asset value per Ordinary share
As at As at
31 March 2025 30 September 2024
Debt at par
Net asset value attributable (£'000) 206,138 203,306
Number of Ordinary shares in issue excluding treasury 301,265,952 301,265,952
Net asset value per share (p) 68.42 67.48
11. Transaction costs
During the period expenses were incurred in acquiring or disposing of
investments classified as fair value through profit or loss. These have been
expensed through capital and are included within losses on investments in the
Condensed Statement of Comprehensive Income. The total costs were as follows:
Six months ended Six months ended
31 March 2025 31 March 2024
£'000 £'000
Purchases - 6
Sales - 66
- 72
12. Fair value hierarchy
FRS 102 requires an entity to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making
the measurements. The fair value hierarchy has the following levels:
Level 1 - Quoted prices in active markets for identical instruments. A
financial instrument is regarded as quoted in an active market if quoted
prices are readily and regularly available from an exchange, dealer, broker,
industry group, pricing service or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an arm's
length basis. The Company does not adjust the quoted price for these
instruments.
Level 2 - Valuation techniques using observable inputs. This category includes
instruments valued using quoted prices for similar instruments in markets that
are considered less than active; or other valuation techniques where all
significant inputs are directly or indirectly observable from market data.
Valuation techniques used for non-standardised financial instruments such as
over-the-counter derivatives, include the use of comparable recent arm's
length transactions, reference to other instruments that are substantially the
same, discounted cash flow analysis, option pricing models and other valuation
techniques commonly used by market participants making the maximum use of
market inputs and relying as little as possible on entity specific inputs.
Level 3 - Valuation techniques using significant unobservable inputs. This
category includes all instruments where the valuation technique includes
inputs not based on observable data and the unobservable inputs could have a
significant impact on the instrument's valuation.
This category also includes instruments that are valued based on quoted prices
for similar instruments where significant entity determined adjustments or
assumptions are required to reflect differences between the instruments and
instruments for which there is no active market. The investment manager
considers observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not proprietary,
and provided by independent sources that are actively involved in the relevant
market.
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement. For this purpose, the
significance of an input is assessed against the fair value measurement in its
entirety. If a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that measurement is a
Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset
or liability.
The financial assets and liabilities measured at fair value in the Condensed
Statement of Financial Position are grouped into the fair value hierarchy at
the reporting date as follows:
Level 1 Level 2 Level 3 Total
As at 31 March 2025 £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Equity investments 5 - 171,406 171,411
Net fair value 5 - 171,406 171,411
Level 1 Level 2 Level 3 Total
As at 30 September 2024 £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Equity investments 79 - 182,446 182,525
Net fair value 79 - 182,446 182,525
As at As at
31 March 2025 30 September 2024
Level 3 Financial assets at fair value through profit or loss £'000 £'000
Opening fair value 182,446 198,450
Purchases including calls (at cost) 7,783 11,210
Disposals and return of capital (25,548) (9,281)
Total gains or losses included in losses on investments in the Statement of
Comprehensive Income:
- assets disposed of during the period 2,674 1,233
- assets held at the end of the period 4,051 (19,166)
Closing balance 171,406 182,446
The Company's holdings in unlisted investments are classified as Level 3.
Unquoted investments, including those in Limited Partnerships ("LPs") are
valued by the Directors at fair value using International Private Equity and
Venture Capital Valuation Guidelines.
The Company's investments in LPs are subject to the terms and conditions of
the respective investee's offering documentation. The investments in LPs are
valued based on the reported Net Asset Value ("NAV") of such assets as
determined by the administrator or General Partner of the LPs and adjusted by
the Directors in consultation with the Manager to take account of concerns
such as liquidity so as to ensure that investments held at fair value through
profit or loss are carried at fair value. The reported NAV is net of
applicable fees and expenses including carried interest amounts of the
investees and the underlying investments held by each LP are accounted for, as
defined in the respective investee's offering documentation. While the
underlying fund managers may utilise various model-based approaches to value
their investment portfolios, on which the Company's valuations are based, no
such models are used directly in the preparation of fair values of the
investments. The NAV of LPs reported by the administrators may subsequently be
adjusted when such results are subject to audit and audit adjustments may be
material to the Company.
13. Related party disclosures
Transactions with the Manager. The investment management fee is levied by AFML
at the following tiered levels, payable monthly in arrears:
- 0.50% per annum in respect of the first £300 million of the net asset value
(with debt at fair value in prior year); and
- 0.45% per annum in respect of the balance of the net asset value (with debt
at fair value in prior year).
The Company also receives rebates with regards to underlying investments in
other funds managed by the Group (where an investment management fee is
charged by the Group on that fund) in the normal course of business to ensure
that no double counting occurs. Any investments made in funds managed by the
Group which themselves invest directly into alternative investments including,
but not limited to, infrastructure and property are charged at the Group's
lowest institutional fee rate. To avoid double charging, such investments are
excluded from the overall management fee calculation.
The table below details all investments held at 31 March 2025 that were
managed by the Group.
31 March 2025
£'000
SL Capital Infrastructure II(A) 28,441
Andean Social Infrastructure Fund I(A) 21,816
Aberdeen Standard Global Private Markets Fund(A) 16,749
Aberdeen Property Secondaries Partners II(B) 5,976
Aberdeen Global Infrastructure Partners II (AUD)(A) 2,081
Aberdeen European Residential Opportunities Fund(C) -
75,063
(A) The value of this holding is removed from the management fee calculation
to ensure that no double counting occurs.
(B) An amount equivalent to the management fee received by the Manager on the
underlying is offset against the management fee payable by the Company to
ensure that no double counting occurs.
(C) Value of holding written down to nil on 31 January 2025.
14. Segmental information
The Directors are of the opinion that the Company is engaged in a single
segment of business being investment business.
15. Subsequent events
Consistent with the significant market disruption outlined in the Chairman's
Statement and the Directors' Responsibilities Statement, the Board continues
to evaluate any impact on the Company in the assessment of its realisation
strategy.
16. Half-Yearly Report
The financial information in this Half-Yearly Report does not comprise
statutory accounts within the meaning of sections 434 - 436 of the Companies
Act 2006. The financial information for the year ended 30 September 2024 has
been extracted from published accounts that have been delivered to the
Registrar of Companies and on which the report of the auditors was unqualified
and contained no statement under section 498 (2), (3) or (4) of the Companies
Act 2006. The interim accounts have been prepared using the same accounting
policies as the preceding annual accounts.
17. This Half-Yearly Report was approved by the Board and authorised for issue on
5 June 2025.
Alternative Performance Measures
Alternative Performance Measures ("APMs") are numerical measures of the
Company's current, historical or future performance, financial position or
cash flows, other than financial measures defined or specified in the
applicable financial framework. The Company's applicable financial framework
includes FRS 102 and the AIC SORP. The Directors assess the Company's
performance against a range of criteria which are viewed as particularly
relevant for closed-end investment companies.
Net asset value per Ordinary share
The net asset value per Ordinary share is calculated as follows:
As at As at
31 March 2025 30 September 2024
£'000 £'000
Net asset value attributable 206,138 203,306
Number of Ordinary shares in issue excluding treasury shares 301,265,952 301,265,952
Net asset value per share (p) 68.42 67.48
Discount to net asset value per Ordinary share
The discount is the amount by which the Ordinary share price is lower than the
net asset value per Ordinary share, expressed as a percentage of the net asset
value. The Board considers this to be the most appropriate measure of the
Company's discount.
31 March 2025 30 September 2024
Net asset value per Ordinary share (p) a 68.42 67.48
Share price (p) b 48.10 44.50
Discount (a-b)/a 29.7% 34.1%
Ongoing charges
The ongoing charges ratio has been calculated in accordance with guidance
issued by the AIC as the total of investment management fees and
administrative expenses and expressed as a percentage of the average daily net
asset values with debt at fair value published throughout the year. The ratio
for 31 March 2025 is based on forecast ongoing charges for the year ending 30
September 2025.
31 March 2025 30 September 2024
£ £
Investment management fees 548,000 948,000
Administrative expenses 769,000 1,509,000
Less: non-recurring charges(A) (39,000) (525,000)
Ongoing charges 1,278,000 1,932,000
Average net assets (B) 205,221,000 298,853,000
Ongoing charges ratio (excluding look-through costs) 0.62% 0.65%
Look-through costs (B) 1.50% 1.71%
Ongoing charges ratio (including look-through costs) 2.12% 2.36%
(A) Comprises legal and professional fees unlikely to recur including those
associated with the cancellation of the capital redemption reserve and the
return of capital to shareholders.
(B) Calculated in accordance with AIC guidance issued in October 2020 to
include the Company's share of costs of holdings in investment companies on a
look-through basis.
The ongoing charges ratio provided in the Company's Key Information Document
is calculated in line with the PRIIPs regulations, which includes financing
and transaction costs. This can be found within the literature library section
of the Company's website: abrdndiversified.co.uk.
END
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