Volta Finance

Well-positioned for a recovery scenario

22 January 2021

Volta Finance (VTA) posted a 5.7% decrease in NAV in 2020, recovering from the initial 32.4% drop in March. This was mainly supported by CLO equity tranches posting solid monthly returns in November and December 2020 at +11.0% and 9.7%, respectively. Volta had anticipated a downturn for some time and repositioned its portfolio into CLO equity over the last two years. During the early-2020 market turmoil, Volta’s manager focused on securing liquidity by fully deleveraging the portfolio and implementing cost-cutting initiatives. In December, Volta introduced a dividend policy to pay 8% of its NAV (in line with historical yields), which currently implies a prospective 9.2% yield on the share price. MORE »

Continued healthy cash yield

4 December 2019

Volta’s (VTA’s) 12-month NAV total return (TR) at end-October 2019 (-3.5%) is below its five-year average of 11.2%. This mostly comes from the declining prices of collateralized loan obligations (CLOs), with the average price of Volta’s USD CLO debt decreasing by 11.5pp of par value y-o-y). The ytd return was mildly positive at 3.1% after a harsh Q418. While market sentiment weighs on valuations, the underlying loan collateral performs well (assisted by record-low default rates), generating strong cash flows (in total, Volta has received €38m in interest and coupons ytd, up 11% year-on-year). Volta’s investment manager steadily increases exposure to long-dated equity tranches at the expense of debt tranches in response to the cycle turn. MORE »

Shift towards CLO equity ahead of cycle turn

9 May 2019

Volta’s NAV TR performance in recent months was influenced by weaker market sentiment towards the end of 2018, which (despite the subsequent rebound) translated into a marginal (c 1%) negative return in H119 ending on 31 January. Returns in February and March were mildly positive, bringing the ytd performance to 4.0%. Importantly, the cash flows generated by Volta’s portfolio remain strong. Moreover, AXA IM used the recent increase in market volatility to deploy the rest of Volta’s dry powder and increase its exposure to CLO equity tranches at attractive prices ahead of any potential turn in the credit cycle. MORE »

Experienced CLO investor with active approach

27 November 2018

Volta Finance provides an opportunity to gain leveraged exposure to US and European cash-generative debt assets, in particular through collateralised loan obligations (CLOs). The fund is managed by AXA Investment Managers (AXA IM), a veteran in the structured finance market with a dedicated team that has 17 years of experience across two credit cycles and a proven track record. This expertise (together with Volta’s adaptable investment strategy) will be important when we approach the end of the credit cycle and future returns may vary significantly depending on the selected CLO collateral, managers and tranches. MORE »