Edison issues update on abrdn Private Equity Opportunities Trust (APEO): Returns and buyback help narrow the discount

London, UK, 4 März 2024

Edison issues update on abrdn Private Equity Opportunities Trust (APEO): Returns and buyback help narrow the discount

abrdn Private Equity Opportunities Trust (APEO) achieved a 5.4% NAV total return (TR) in FY23 (to end-September 2023) despite muted private equity (PE) deal activity and foreign exchange headwinds (its portfolio value was up 9.4% excluding fx). We believe that APEO’s expansion into direct investments since 2019 has shown promising results so far, with a rise in value by a strong 18.5% in FY23. APEO’s balance sheet remains solid with a coverage ratio of c 35% at end-January 2024, as net capital calls from its fund investments were offset by the partial exit of Action (at 100% of NAV). APEO recently launched a buyback programme, which was well received by the market (share price up c 10% since the announcement). Still, APEO trades at a 29% discount to NAV versus a 10-year average of 23%.

APEO offers quality exposure to the PE mid-market through a portfolio of investments managed by carefully selected, top-tier European general partners (GPs) with solid sector expertise (the 12 ‘core’ GPs make up 57% of APEO’s NAV). This strategy has proved successful, with APEO’s five- and 10-year NAV TR to end-January 2024 at c 15% pa, ahead of both the MSCI Europe Small Cap Index and the UK All-Share index, and broadly in line with its close PE peers. Moreover, its combined 51% exposure to less cyclical sectors such as technology (typically profitable B2B software), healthcare and consumer staples, together with the wide discount to NAV, may offer some downside protection in the current environment. 

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