Shareholders of Abrdn Diversified Income and Growth have voted overwhelming in favour of winding down the trust, with 97.1% approving the move.
Its directors proposed the action as a solution to its persistent and entrenched discount – the trust currently trades at a 29.8% discount and has not been at a premium since March 2019.
Approximately £115m will be repaid to shareholders in the first half of the year, but shareholders may not see the remaining £188.8m until 2029 at the earliest.
Due to its holdings in private assets, £107.3m of the trust’s positions will not mature until between 2024 and 2027, with £81.5m expected to reach maturity between 2029 and 2033.
See also: Abrdn Diversified Income and Growth will repay £115m in the first half of 2024
Currently, over half (57.4%) of the portfolio is held in private markets, with smaller positions in equities (26.8%) and fixed income (16.3%).
The trust upped exposure to private assets in 2020 in an effort to steady net asset value (NAV) returns, yet it has still struggled against interest rates in the ensuing years, according to Andrew Courtney, investment analyst at QuotedData.
Abrdn Diversified Income and Growth is down 2.7% over the past three years, but this underperformance stretches back over the long term, with the trust falling 6.5% over the past decade.
Coutrney added: “It was originally constructed to give shareholders access to the kind of diversified portfolio held by large, sophisticated global managers, particularly given its exposure to a range of assets, including alternatives, which would not traditionally be available to private investors.
“Unfortunately, as yet this has not quite played out as planned, with performance trailing its own objective, broader market benchmarks and peer group averages both over the medium and longer term.”
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