Volta Finance (VTA): Value added by active portfolio management
In this note, we explore Volta’s portfolio positioning, increasing its CLO equity weight and reducing the CLO debt proportion. We show how this has helped deliver relative resilience amid the COVID-19 crisis to date, with AXA IM selecting investments i) whose price already reflected a downturn, ii) of recent vintage, and iii) in defensive sectors. Volta marks to market its investments, and has suffered from sentiment-driven effects. Annualised received cashflows, though, represent 17% of July NAV, and market conditions have been improving. We examine the upside optionality that Volta’s portfolio provides to any further recovery.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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