Abrdn to invest £30m in shares of its closed-end funds

Abrdn plc HQ, Edinburgh

Abrdn has announced a new initiative to “demonstrate its commitment” to the range of UK listed closed-ended funds that it manages — by investing an amount equal to up to six months’ worth of management fees in the shares of those funds.

Abrdn is the third largest manager of listed closed end funds in the UK, and the group manages and administers almost £500 billion of assets.

The proposed investments will be subject to applicable law and regulation and to existing contractual obligations, but Abrdn expects the total amount invested as part of this initiative will exceed £30 million.

Abrdn said the investments will be made “as and when” the relevant management fees are received.

“Discounts across the investment company sector recently hit a 15 year high, with the average at 16.9% at end October 2023, the widest month end discount since the global financial crisis, according to the Association of Investment Companies (AIC),” said Abrdn.

“While that average discount narrowed to 12.3% at 30 November, headwinds remain for the sector.

“Despite the significant discounts that many investment companies are currently experiencing, Abrdn believes in the underlying value of its listed closed-ended funds and is launching this new initiative to further align itself with the underlying shareholders of those funds.”

Christian Pittard, Abrdn’s Head of Listed Funds, said: “We strongly believe in the significant underlying value of our investment trust range.

“This initiative underpins our firm commitment and long-term optimism in both the investment company business and the value of the underlying assets in abrdn’s range.

“We also believe this initiative across the full range is good practice during a time of particular challenge for the UK’s closed end fund sector and builds upon similar practices seen at an individual trust level, both at Abrdn and elsewhere.

“While there has been much narrative on potential buying opportunities in the sector, we also want to align ourselves more closely with existing shareholders of the funds we manage.

“This initiative demonstrates our strong advocacy for the integrity of the UK’s listed investment trust sector, with its unique structure and independent boards of directors to represent shareholder interests.”