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Edison Investment Research Limited
London, UK, 25 October 2023
Edison issues update on abrdn Private Equity Opportunities Trust (APEO): Resilient NAV and stable balance sheet abrdn Private Equity Opportunities Trust (APEO) posted a 12-month NAV TR of 5.1% to end-September 2023 amid persistently muted exit activity across PE markets and FX headwinds from stronger sterling. APEO’s drawdowns continue to outpace distributions, but the 12-month net capital calls were more than offset by the proceeds APEO received from the partial sale of its co-investment in non-food discount retailer Action. As a result, APEO’s balance sheet headroom, as measured by its commitment coverage ratio, remained broadly stable versus end-2022. Its discount to NAV of 44% is wider than its 10-year average of 23% and the c 10% average discount for buyout portfolios traded in the secondary markets in H123. 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 55% of APEO’s NAV). This high-conviction strategy has proved successful over the mid to long term with APEO’s five- and 10-year NAV TR to end-September 2023 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 52% 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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1757273 25-Oct-2023
