REG - abrdn Diversfd. I&G - Update on Managed Wind-Down

abrdn Diversified Income and GrowthAnnouncement

Wed 10:45

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RNS Number : 6363B  abrdn Diversified Income and Growth  01 October 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION (EU) NO 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED ("UK MAR"). ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

1 October 2025

For Immediate Release

ABRDN DIVERSIFIED INCOME AND GROWTH PLC

(the "Company")

Update on Managed Wind-Down

The Board is pleased to announce that the Company has now either received
binding offers for, or is in advanced discussions regarding, the entirety of
its private markets portfolio.

Following the announcement made by the Company on 16 April 2025 (the "April
Announcement"), the Company has now fully redeemed its £17 million interest
in the Aberdeen Global Private Markets Fund at its prevailing net asset value
("NAV") and is well progressed in selling the remainder of its portfolio
having undertaken a comprehensive marketing exercise. This process involved
engaging with over 85 credible secondary market participants and resulted in
more than 25 credible non-binding offers being received (with each covering
single or sub-portfolios of funds within the Company's underlying investment
portfolio).

The Company has now signed the first conditional sale agreements of its
secondary sales process (the "Secondary Sales Process") in respect of a
substantial sub-portfolio of private market investments, representing 33 per
cent. of the Company's NAV as at 29 September 2025((1)), at a blended 28.5 per
cent. discount to the reference date valuation((2)) (before customary
completion adjustments and costs). This compares favourably to the Company's
current share price discount to NAV per share (33 per cent. as at 29 September
2025) given the Company's material cash position reflected in the NAV.

The Board expects that the balance of the portfolio should be sold or under
offer by the end of the calendar year((3)).

Based on initial offers received by the Company, the Board expects the assets
that have been marketed((3)) could be sold at a blended discount of between 30
per cent. and 35 per cent. to the reference date valuation((2)) (before
customary completion adjustments and costs). Such sale proceeds would be in
addition to the Company's significant holding of cash and cash equivalents
(approximately £55 million as at 29 September 2025) and any future proceeds
from the redemption of the Company's interest in the PIMCO Private Income Fund
(which is expected to take place in Q4 2026).

In addition to the interim dividend of 1.5 pence per share declared by the
Company on 25 September 2025 (which will be paid on 30 October 2025), the
Board confirms that the next return of capital will follow in November 2025.

Update on the Secondary Sales Process

Following the April Announcement, the Company has been progressing its
Secondary Sales Process to explore opportunities to optimise the value of the
Company's investments whilst progressively returning cash to shareholders in a
timely manner.

The Company, through its advisers, has undertaken a thorough market testing of
its remaining private market assets with over 85 potential investors
approached, over 60 of which entered into confidentiality agreements and
undertook initial due diligence on the portfolio. Following that first phase
of diligence, the Company received indications of interest and indicative
offers from 27 credible third parties for sub-portfolios (or individual
assets) which, when aggregated, covered the entirety of the private market
assets.((3))

The Board confirms that it is now in advanced discussions with several
interested parties regarding potential secondary sales of the Company's
private market assets. In particular, the Board is pleased to announce that it
has agreed terms for the proposed sale of all or part of its interest in 15
underlying fund investments and private market assets (the "Fund Interests"),
representing approximately 33 per cent. of the Company's NAV as at 29
September 2025((1)), to two funds managed by members of the Patria Investments
group (together, "Patria") (the "Initial Secondary Sales") at a blended 28.5
per cent. discount to the reference date valuation((2)) (before customary
completion adjustments and costs). This is expected to result in the Company
receiving net cash consideration of approximately £47 million (in aggregate)
after transaction costs.

The Board continues to believe that the 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 and is pleased
with the progress to date given the nature of the portfolio. The Board,
together with its advisers, assessed various overlapping proposals and
negotiated the scope of the best offers in order to enhance value for
shareholders. The pricing of the indicative offers was, as anticipated, at a
material discount to the prevailing NAV of the relevant fund interests and
generally around the blended pricing of the Initial Secondary Sales (but
naturally varied by asset and asset class).

The Board has continued to assess the strategic options available to the
Company on the basis of, amongst other things, the quantum expected to be
delivered to shareholders (on a net present value basis), timing and relative
certainty of execution. The Board notes that, in particular, the value that
could be achieved for shareholders (on a net present value basis) through the
Secondary Sales Process is greater than that which the Company's investment
manager expects to achieve through the continuation of its 'base case' plan
for the managed wind-down. Both values remain materially higher than that of
the rejected full-portfolio disposal referenced in the April Announcement. The
Board also notes that the Secondary Sales Process is expected to materially
accelerate returns to shareholders compared to holding the assets to their
natural maturity (between 2025 and 2033).

In the light of these factors, the blended pricing of the Initial Secondary
Sales relative to third party offers for individual assets and the derisking
that could be achieved through executing a sale to effectively one
counterparty in respect of several fund interests, the Board has concluded
that the Initial Secondary Sales are in the best interests of shareholders as
a whole.

The Board believes that selecting the Initial Secondary Sales and advancing
discussions with the preferred counterparties for other secondary sales will
achieve the best price from the Secondary Sales Process whilst securing offers
for the remainder of the investment portfolio((3)).

The Initial Secondary Sales

The Company confirms that it has signed sale and purchase agreements with
Patria in respect of the Initial Secondary Sales. The purchase price for each
of the Fund Interests will be adjusted for distributions received, and capital
contributions made, by the Company since the valuation reference date((2)).

The Fund Interests cover a range of asset classes (predominantly private
equity but also infrastructure, real estate and private credit). The Fund
Interests include a number of smaller secondary private equity holdings and
six of the Fund Interests each have a NAV of less than £500,000.

As at 29 September 2025 the Company's undrawn commitments stood at
approximately £26 million, of which approximately £18 million related to the
Fund Interests. Upon completion, the transfer of the Fund Interests pursuant
to the Initial Secondary Sales will therefore unlock a significant amount of
cash which is currently being retained by the Company in respect of such
undrawn commitments.

Each of the transfers of the Fund Interests remains subject to, amongst other
things, consent from the underlying managers or general partners of the Fund
Interest ("GPs") to the transfer being obtained or formalised. The Company and
Patria are using their respective reasonable endeavours to procure such
consents. The timing of receipt of consideration from the Initial Secondary
Sales will be driven by the closing date of the transfer of the relevant Fund
Interest. It is expected that the majority of the Initial Secondary Sales will
complete on or prior to 31 December 2025.

Further secondary sales

The sale agreements for the Initial Secondary Sales are the first to be signed
as part of the Secondary Sales Process. Alongside the Initial Secondary Sales
process, the Company confirms that it is in exclusive negotiations with
selected potential purchasers in respect of the Company's remaining private
market assets. 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 or
in connection with the Secondary Sales Process at this time. 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 receive
binding offers for all of its investments at sufficiently attractive prices).

The Board will provide further updates, as appropriate, in due course.

Future returns of capital

The Company remains committed to returning the net proceeds of any
realisations to shareholders progressively in an efficient and fair manner by
way of its B share scheme.

The Board has sought to optimise returns to shareholders through the exercise
of near-term redemption mechanics within the underlying fund documentation
where available. As at 29 September 2025, following the recent redemption of
the Company's interest in the Aberdeen Global Private Markets Fund for
approximately £17 million, the Company had approximately £55 million of cash
and cash equivalents, primarily invested in money market funds pending
distribution to shareholders, and undrawn commitments of approximately £26
million (including any capital distributions received by the Company that can
be recalled).

In line with the Company's investment objective, the Board intends to
distribute as much capital as possible following any near-term secondary sales
(subject to consideration of the Company's actual and contingent liabilities,
remaining undrawn fund commitments and general working capital requirements).

The Board confirms that a further return of capital by way of the B share
scheme is expected to be paid in November 2025. The timings and quantum of
that return of capital will be announced by the Company shortly. The quantum
to be returned will depend on the number of secondary sales that complete in
the near-term (if any), and the Company's remaining undrawn commitments
following such sales. Such further return of capital will be in addition to
the Company's first interim dividend of 1.5 pence per ordinary share in
respect of the current financial year, being approximately £4.5 million in
aggregate, which was declared on 25 September 2025 and will be paid on 30
October 2025.

Thereafter, the Board intends to make a further return of capital in Q1 2026
either by way of the B share scheme or as an initial distribution under
members' voluntary liquidation, as discussed below.

Potential timeline for the managed wind-down

In the light of the progress with the Secondary Sales Process, the Board is
exploring putting forward proposals in Q1 2026 to place the Company into
members' voluntary liquidation if substantially all of the Company's
investments have been realised by such time. It is likely that certain of the
Company's assets (such as PIMCO Private Income Fund, which is expected to be
exited through the fund's redemption mechanics in Q4 2026, and any private
market assets that are not sold in the Secondary Sales Process) will be
retained by the liquidators and realised during the liquidation period
thereafter.

The proceeds of the realisation of the Company's portfolio during the
liquidation period would be distributed to shareholders after the Company's
outstanding liabilities and the costs of implementing the proposals, including
the liquidators' fees, have been met.

As noted above, there can be no certainty that the Company will receive
binding proposals for all of its investments at sufficiently attractive prices
pursuant to the Secondary Sales Process.

Change to accounting reference date

In the light of the potential timeline for liquidation, the Board has resolved
to change the Company's accounting reference date for the previous accounting
period from 30 September 2025 to 31 March 2026 with immediate effect. This
change seeks to avoid unnecessary work being undertaken before the Company
enters into liquidation (if it does so in Q1 2026) by deferring the
requirement to publish an annual report and audited financial statements. This
is expected to result in a cost saving for the Company and, accordingly, is
considered to be in the best interests of shareholders.

As a result of this change in the accounting reference date, the Company's
reporting timetable will be as follows (in each case unless the Company has
entered into members' voluntary liquidation prior to the relevant deadline for
publication):

·      Publication of an interim report and unaudited financial
statements for the six month period ending 30 September 2025, by no later than
31 December 2025.

·      Publication of an annual report and audited financial statements
for the financial year ending 31 March 2026, by no later than 31 July 2026.

·      From then, interim and annual reports would be published each
year for the six months to 30 September and the 12 months to 31 March,
respectively.

Change to NAV reporting frequency

The Company currently publishes a daily NAV to the market. The Board notes
that, following the commencement of the managed wind-down in February 2024,
the Company's investment portfolio primarily comprises private market assets,
which are valued by the GPs on a quarterly or semi-annual basis, rather than a
mix of public equities and private market investments (as the Company has held
historically). The current daily NAV does not, in the ordinary course, include
revaluation of the private holdings other than to account for foreign exchange
movements. Therefore, the Company announces that it has ceased to publish a
NAV for the Company every business day from today and will publish a month-end
NAV going forward (with the first month-end NAV being published in respect of
30 September 2025).

The Board, in conjunction with the Company's investment manager (abrdn Fund
Managers Limited), will from time to time make adjustments to the valuation of
its unlisted investments reported by the GPs to reflect the fair value of such
investments in accordance with the Company's valuation policy for unlisted
investments. In particular, the Company will adjust the valuation of any
assets in respect of which the Company has entered into a binding sale
agreement (whether conditional or unconditional). Accordingly, the Company's
NAV as at 30 September 2025 will reflect the adjusted value of the Fund
Interests. The Company will continue to make announcements regarding any
developments in respect of the portfolio that have a material impact on the
Company's NAV, such as material secondary sales.

Enquiries:

abrdn Diversified Income and Growth plc

Davina Walter
(Chairman)
via Burson Buchanan

Dickson Minto Advisers LLP

Douglas Armstrong / Andrew Clark / Jamie Seedhouse            +44
(0)20 7649 6823

Campbell Lutyens & Co Ltd

Ben Pearce / Alex Wimborne
                           +44 (0)20 7439 7191

Burson Buchanan

Helen Tarbet / Henry Wilson / Nick
Croysdill                            +44 (0)20 7466
5000

 
 
 ADIG@buchanancomms.co.uk

Notes:

(1) For the avoidance of doubt, the Company's reported NAV as at 29 September
2025 does not include an adjustment to the value of the Fund Interests in the
light of the Initial Secondary Sales.

(2) As at 31 March 2025 (save for three Fund Interests which use a 31 December
2024 reference date valuation due to a more recent valuation not being
available at the commencement of the Secondary Sales Process).

(3) The Company's interests in Aberdeen Global Private Markets Fund (which was
exited through the fund's redemption mechanics in September 2025) and PIMCO
Private Income Fund (which is expected to be exited through the fund's
redemption mechanics in Q4 2026) were excluded from the Secondary Sales
Process. The Company's residual interests in Markel Catco Reinsurance
Opportunities Fund (a de minimis holding in a fund which is in managed
wind-down) and Aberdeen European Residential Opportunities Fund (the value of
which was written down to nil on 31 January 2025) were also excluded from the
Secondary Sales Process.

 

Important information

This announcement is released by the Company and the information contained
within this announcement is deemed by the Company to constitute inside
information for the purposes of Article 7 of UK MAR. Upon publication of this
announcement via a Regulatory Information Service, such information is now
considered to be in the public domain. The person responsible for arranging
for the release of this announcement on behalf of the Company is abrdn
Holdings Limited, the Company Secretary.

The Company's LEI number is 2138003QINEGCHYGW702.

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