REG - abrdn Pvt Equity - Share Buyback Programme
25/01/2024 07:00
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RNS Number : 8134A abrdn Private Equity Opp Trst plc 25 January 2024
25 January 2024
abrdn Private Equity Opportunities Trust plc
Legal Entity Identifier (LEI): 2138004MK7VPTZ99EV13
Share Buyback Programme
The Board of abrdn Private Equity Opportunities Trust plc ("APEO" or the
"Company") is committed to ensuring that the Company is run in the best
interests of its shareholders. As part of its duties in fulfilling that
commitment, the Board and the Manager closely monitor the performance and
valuation metrics relating to the underlying portfolio, as well as the
evolution of the Company's share price, market capitalisation, discount to net
asset value ("NAV") and shareholder register.
During the last 18 months, like many of its peers, APEO's share price has
diverged materially from its NAV, resulting in the Company's shares trading at
a material discount, in excess of the long-term average (which was 22.3% over
the 10 years to 30 September 2023). During the Company's 22-year history, the
share price discount to NAV has only been wider during the Global Financial
Crisis and the onset of the Global Pandemic.
It is the Board's view that APEO's current share price presents an exceptional
investment opportunity for the Company. Notably, APEO has in recent months
proactively undertaken a series of partial secondary sales of its
co-investment in Action for portfolio construction reasons. All of these
disposals have been achieved at 100% of the most recent quarterly valuation of
that asset. Furthermore, the underlying portfolio company exits from APEO's
fund investments during 2023 have, on average, been transacted at sale
valuations in excess of the unrealised valuation two quarters prior.
In accordance with the approval provided by shareholders at the AGM in March
2023, the Company has the power to buy back up to 8,056,569 of the Company's
shares. The authority expires at the AGM in March 2024, when similar
authority will be requested from the Company's shareholders. The Board
believes that any decision to buy back APEO's shares must always be balanced
against considerations such as the Company's balance sheet position, level of
outstanding commitments and cashflow forecasts. Furthermore, longer term
considerations, such as increasing APEO's exposure to direct co-investment,
which typically require full cash funding upfront, and the Company's
relatively concentrated shareholder base, must also be considered.
In weighing up the circumstances and considerations set out above, the Board
has decided to use a portion of the €34.6 million of proceeds realised from
the most recent sale of APEO's direct co-investment in Action to commence a
buyback programme.
The ability to recycle a significant portion of the Action proceeds, realised
at 100% of its 30 June 2023 valuation, into buying APEO shares at a
significant discount to NAV, is a compelling use of the Company's capital at
this time and provides immediate NAV accretion to APEO's shareholders. It also
highlights in the clearest terms the disconnect between APEO's current share
price and the valuation of its underlying portfolio.
Going forward, the Board will continue to monitor the evolution of the share
price and, in the event of further sizeable distributions from the portfolio,
may look to extend the programme. The Board also notes that, since 2016, the
Company has paid shareholders an enhanced dividend on a quarterly basis, which
is effectively a regular return of capital to shareholders at NAV. For the
avoidance of doubt, the Board intends to continue this policy going forward,
with the aim of maintaining the value of the dividend in line with inflation.
For further information please contact:
Alan Gauld
Lead Portfolio Manager, abrdn Capital Partners LLP
Tel: 0131 528 4424
Paul Evitt
Abrdn Holdings Limited, Company Secretary
Tel: 0131 372 9371
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