Volta Finance - Continued healthy cash yield
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.Volta Finance is a closed-ended investment company with the objective of investing, among other asset types, in the following main asset classes: Collateralized Loan Obligation, Synthetic Corporate Credit, Cash Corporate Credit and ABS. Co. has appointed AXA Investment Managers Paris S.A., as its Alternative Investment Fund Manager to manage the investments of Co.
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