abrdn Private Equity Opportunities embarks on share buyback programme

investmentweek.co.uk:

The board said it will consider expanding the programme if substantial distributions from the portfolio take place.

In a stock exchange notice today (25 January), the directors said the programme will be funded by using a portion of the €34.6m of proceeds realised from the most recent sale of APEO's direct co-investment in Action. 

The trust has the power to buy back up to 8,056,569 shares, in accordance with shareholder approval at the annual general meeting in March 2023. As the share buyback authority expires in March, a similar authority will be requested at the upcoming AGM. 

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The board noted that, like many of its peers, APEO's share price has diverged materially from its net asset value in the last 18 months, resulting in a discount much steeper than the long-term average.

According to the Association of Investment Companies, APEO is currently trading at a 38.7% discount. During its 22-year history, the recent discount to NAV has only been wider during the Global Financial Crisis and the onset of the pandemic, the board noted. 

The directors said that while the current share price presents an «exceptional investment opportunity», any decision to buy back shares «must always be balanced» against other considerations, such as balance sheet position, level of outstanding commitments and cashflow forecasts. 

Additionally, the board emphasised the need to take into account longer-term factors, such as increasing APEO's exposure to direct co-investment, which typically require full cash funding upfront, and the trust's relatively concentrated shareholder base.

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