October 2025 Monthly

Volta brings investors liquid access to the “hot” private credit market. We note the multi-currency, multi-exchange traded access it provides all investors to i) the illiquid but attractive CLO market, with its embedded risk-enhancement in CLO structures and good risk-adjusted returns, and ii) a manager of that expertise-dependent asset class with a track record of through-cycle, peer outperformance. Private credit has been one of 2025’s “hot” asset classes; barely a day passes without some announcement but with investment mainly restricted to larger, institutional investors. Volta’s AEX and LSE, and € and £, listings give retail investors liquidity to that market. Volta also offers portfolio diversification, and a high, covered, dividend yield.

• August factsheet:  Following 6.2% gains in May-July, NAV total return for August was a 0.8% decline (cumulative performance from Aug’24 to date to +13.9%). Volta’s latest six-month cashflow generation was slightly up, at €28m; ca.21% of July’s NAV on an annualised basis. Cash stood at 16.7% of gross assets.
• Investor portfolio diversification: Volta’s total returns have no correlation with benchmark bond indices. Over the long term, it has outperformed UK and European markets, and by providing investors with more stable dividend income, and less volatile capital gains, it also provides diversification from this asset class.
• Valuation: Volta trades at a double discount: its share price is at an 8% discount to NAV, and we believe its mark-to-market approach includes a sentiment-driven discount to the expected cashflows. Volta’s yield is a key attraction, and, in our view, it is likely to be more than 2x covered, giving investors considerable comfort.
• Risks: Credit risk is a key sensitivity. We examined the valuation of assets, highlighting the multiple controls to ensure its validity, in our September 2018 initiation note. The NAV is exposed to sentiment towards its own and underlying markets. Volta’s long $ position is only partially hedged.
• Investment summary: Volta is an investment for sophisticated investors, as both the NAV and the discount to NAV may be volatile over time. We note that some competitors to Volta, historically, had a more stable NAV valuation due to a different asset valuation approach. Fundamental, long-term share returns are robust: 9.7% p.a. (dividend reinvested basis) since inception to end-July 2025. 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.