Edison issues update on abrdn PEO Trust

abrdn Private Equity Opp Trst plc

18 July 2023

 

London, UK, 18 July 2023

Edison issues update on abrdn Private Equity Opportunities Trust

abrdn Private Equity Opportunities Trust (APEO) posted a 12-month NAV total return (TR) to end-May 2023 of 7.0%, supported by continued strong portfolio earnings momentum (up 28.7% over the 12 months to end-March 2023 for APEO's top 50 holdings). Muted global M&A volumes continue to weigh on private equity (PE) exit activity, with APEO's capital calls in the calendar year to end-May 2023 (£74.0m) outpacing distributions (£54.1m). That said, APEO's undrawn credit facility and cash of £243.4m at end-May 2023 provide it with decent near-term balance sheet headroom, as these cover 35% of APEO's outstanding investment commitments (which should be drawn gradually in the coming years).

APEO offers a 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 high-conviction strategy has proved successful over the mid- to long-term with APEO's five-year and 10-year NAV TR to end-May 2023 at 17% and 15% pa, respectively, ahead of the MSCI Europe Small Cap Index TR of 2.5% and 9.5%, respectively, 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 c 39% discount to NAV, may offer some downside protection in the current environment.

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