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