abrdn Private Equity Opportunities Trust - Laying the foundations for future returns

abrdn Private Equity Opportunities (APEO) has recently been trading at discounts to NAV in excess of 40%, way above its long-term average of around 16-17%, perhaps suggesting that the market is pricing in an NAV fall comparable to that seen during the GFC. Alan Gauld, APEO’s lead portfolio manager, thinks this is nonsensical. He comments that private equity has changed immeasurably since the crisis and APEO’s portfolio is focused on managers invested in cash generative businesses that are able to finance their growth. Add in APEO expanding its co-investment side (17% of NAV as at 31 March 2022), an increased focused on sector specialists that could be better able to add value, traditionally conservative valuations for private equity positions and a focus on the mid-market where there appears to be less competition. He says that the current discount adds to what is an already compelling opportunity.