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The manager’s August review noted “Within credit markets, leveraged loans continued to outperform traditional fixed income assets, benefiting from strong investor demand and their floating-rate profile. Investment Grade credit remained under pressure as higher sovereign yields weighed on total returns, while High Yield proved more resilient. CLO primary market activity remained healthy, although issuance slowed modestly during the summer period. Spreads were broadly stable across the capital structure, supported by solid demand and limited supply, while CLO equity tranches continued to face pressure from elevated liability costs and tighter underlying loan spreads.” After a subdued 1Q’26, a steady positive TR has continued through the summer.

  • Latest factsheet:  August saw a +0.5% NAV TR. Volta’s CLO equity tranches returned +0.7% while its debt tranches returned +0.9% performance. The fund generated €17.5m in interest over the past six months (annualised 14% of NAV). BNPP AM remain cautious given the macroeconomic uncertainty.
  • Limited share price volatility:  In the past four months, VTA’s share price in € (see here for chart) has shown more stability, trading in a €5.80-€6.12 range. In our view, this reflects limited company-specific news flow and the market being more sanguine about macro developments, particularly concerning Iran.
  • Valuation:  Volta trades at a double discount: its share price is at a 9% discount to NAV, and we believe its NAV includes a sentiment-driven discount to the expected cashflows. Volta’s yield (2027E: 9.8%) is a key attraction. In 2027, we forecast >2x statutory cover, 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. Fundamental, long-term share returns are reasonable: 8.9% p.a. (dividend reinvested basis) since inception to end-June 2026. Volta’s returns for investments made after the financial crisis were double those in prior years.
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