Volta Finance

LN: VTA

€206.3m market cap

€5.64 last close

Volta Finance was established in December 2006 and its investment objective is to preserve capital across the credit cycle and provide a stable income stream to its shareholders through investment in a diversified portfolio of structured finance assets providing leveraged exposure to portfolios composed of a broad range of cash-generative debt assets.

Investment summary

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.

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Share price graph
Price performance
%
1m
3m
12m
Actual 11.9 41.0 (14.0)
Relative* 9.9 25.0 (8.3)
52-week high/low €6.7/€3.3
*% relative to local index
Key management
Serge Demay Senior Portfolio Manager