The £336 million investment trust Abrdn Diversified Income and Growth plc (ADIG) announced that amid the fund’s “entrenched discount to net asset value” its board has concluded that “it is in the best interests of shareholders as a whole to put forward proposals for a managed wind-down of the company.”

The fund said that following its announcement of an enhanced distribution programme on October 26, 2023, further detailed discussions with shareholders were undertaken.

“In the light of the feedback received during these conversations and the entrenched discount to net asset value (NAV) at which the company’s shares continue to trade, the board has concluded that it is in the best interests of shareholders as a whole to put forward proposals for a managed wind-down of the company …” said the trust.

“Pursuant to the managed wind-down, the company proposes to conduct an orderly realisation of its assets in a manner that seeks to optimise the value of the company’s investments whilst progressively returning cash to shareholders.”

According to Association of Investment Companies data, ADIG has been trading at a 31.4% discount.

Abrdn is in the process of closing or merging a significant number of its funds.

The Abrdn Diversified fund said it expects that £115 million would be returned to shareholders in the first half of 2024 at, or close to, net asset value — subject to shareholder approval — with further returns of cash to follow as value is realised from the company’s private markets portfolio.

About £107.3 million of the fund’s private markets portfolio is expected to mature between 2024 and 2027 and it is intended that proceeds from the first tranche would be returned to shareholders “in a timely manner as the investments mature.”

The remaining £81.5 million of the private markets portfolio is expected to mature between 2029 and 2033. “As market conditions improve, opportunistic secondary sales of second tranche assets would be considered by the company in order to realise value from these assets in a timely manner,” said the fund.

Implementation of the managed wind-down will require shareholder approval at the company’s annual general meeting currently anticipated to be held on February 27, 2024.