25 Jan 2024 07:00
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