Volta Finance Ltd
Volta Finance Ltd

Volta Finance Ltd (LON:VTA, LON:VTAS, VTA.AS) is a closed-ended limited liability company registered in Guernsey under the Companies (Guernsey) Law, 2008 (as amended). The Company is an authorised collective investment scheme in Guernsey, regulated under The Protection of Investors (Bailiwick of Guernsey) Law, 1987.

Investment objectives

The Company’s investment objectives are to seek to preserve capital across the credit cycle and to provide a stable stream of income to its Shareholders through dividends that it expects to distribute on a quarterly basis.

Volta Finance seeks to attain its investment objectives predominantly through investment in a diversified portfolio of structured finance assets. The Company’s investment strategy focuses on direct and indirect investments in, and exposures to, a variety of assets selected for the purpose of generating overall stable and predictable cash flows for the Company, with the view to attaining the Company’s investment objectives.

Volta Finance Ltd

The Investment Manager

AXA IM is a multi-expert asset management company within the AXA Group, a global leader in financial protection and wealth management, which has a team of experts concentrating on the structured finance markets. AXA IM is authorised by the Autorité des Marchés Financiers (the “AMF”) as an investment management company and its activities are governed by Article L. 532-9 of the French Code Monétaire et Financier. AXA IM was appointed as the Company’s Alternative Investment Fund Manager (“AIFM”) in accordance with the EU Alternative Investment Fund Management Directive (“AIFMD”) on 22 July 2014.

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Volta Finance Ltd

Volta Finance Ltd share price

Fundamentals

52 Week High / Low

News

Interviews

Volta Finance Ltd: Can 2025 Outshine a Stellar 2024 Performance? (Video)

Volta Finance Ltd (LON:VTA, VTAS) delivered impressive returns in 2024, significantly outperforming comparable asset classes. In this interview, Mark Thomas, analyst at Hardman & Co, highlights the key drivers behind Volta’s recent success and outlines why he anticipates another robust performance in 2025. Thomas shares insights into Volta’s strategic asset management, particularly in CLO equity and debt, and addresses the risks and opportunities investors should watch closely. With cashflow generation remaining strong and risks effectively managed, investors have plenty of reasons to keep a close eye on Volta’s next moves.

https://vimeo.com/1060167406

Volta Finance Ltd focuses on capital preservation and generating a stable dividend income stream through strategic investment primarily in collateralised loan obligations (CLOs).

Question & Answers

Analyst Notes & Comments

Hardman & Co

Insights from Volta Finance’s report and accounts: Strong Returns, Resilience and Valuation

In this note, we review the key information and messages investors should take from the recent Report and Accounts. In particular, we note the detailed explanations as to how Volta Finance Limited (LON:VTA) is delivering strong returns. This performance reflects the sound fundamentals of the CLO investment market and the value specifically added by the manager (reaffirming the issues we identified in our note, The benefits of having AXA IM as the manager). In terms of outlook, the expected relative resilience of the portfolio was also noted. By way of example, the CLO managers in which Volta invests, are expected to mitigate the impact of anticipated market-wide lower recoveries through investing in better-quality underlying assets.

  • Strong current position: Volta Finance’s current cash receipts are over 20% of NAV, reflecting low defaults (strong corporate cashflows and profitability, ability to pass on inflation to date), low locked-in CLO borrowing costs, CLOs being floating-rate investments and Volta’s portfolio positioning in recent years into CLO equity.
  • Resilience: The rating agency’s/Volta’s/our confidence in a relatively low expected level of defaults reflects i) a strong starting position, including high cash cushions in CLO structures, ii) a preponderance of private equity (PE), iii) inflation still being friend, not foe, iv) covenant-lite documentation, and v) diversification.
  • Valuation: The Company trades at a double discount: its share price is at a 24% discount to NAV, and we believe its mark-to-market (MTM) NAV still includes a further sentiment-driven discount to the present value of expected cashflows. Volta targets an 8% of NAV dividend (10.4% 2024E yield on current share price).
  • Risks: Credit risk is a key sensitivity. We examined the valuation of assets, highlighting the multiple controls to ensure its validity, in our initiation note, in September 2018. The NAV is exposed to sentiment towards its own and underlying markets. Volta’s long $ position is only partially hedged.
  • Investment summary: Volta Finance is an investment for sophisticated investors, as both the NAV and the discount to NAV may be volatile over time. We note the closest competitor to Volta has had a more stable NAV valuation due to a different asset valuation approach. Fundamental long-term returns have been robust: 8.0% p.a. (dividend reinvested basis) since inception. Volta’s performance relative to that of its peers has been strong, and returns for investments made after the financial crisis were double those in prior years.

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Volta Finance Ltd share price

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