The Aberdeen Diversified Income and Growth Trust delivered a 12.5 per cent net asset value return this year, as it increased its exposure to alternatives and private markets.
The trust, which seeks to provide long-term income and capital appreciation through a multi-asset portfolio, saw a share price total return of 15.6 per cent in the year to September 30, reversing the negative 10.6 per cent return seen in the previous year.
In a statement to the stock exchange today (December 9), the firm’s investment managers, Nalaka De Silva, Jennifer Mernagh and Nic Baddeley said they had increased the trust’s exposure to private markets from 25 per cent to 44 per cent, as they saw heightened demand for private market investments.
This is “symptomatic” of the “struggle to generate differentiated performance in listed markets”, they said.
The increase in exposure was to private credit, diversified private markets, infrastructure, private equity and royalties.
“Performance was pleasing from most sub-asset classes, but was driven mostly by infrastructure and private equity."
The managers added exposure to UK ports through the Pan-European Infrastructure Fund holding also made a big contribution to performance.
“The investment, which was identified by Abrdn's network, involved buying part of an existing portfolio of well-performing UK ports, and a water supply and treatment utility, at a sizeable discount to the portfolio's inherent value," they said.
“This uplift has been further enhanced, since purchase, as an unsolicited offer was received for the ports business.”
The trust will pay a fourth interim dividend on January 20, bringing total dividends for the year up 15 per cent to 5.52p per share.