Net Asset Value as at 31 March 2019
Volta Finance Limited (VTA / VTAS) –
March 2019 monthly report
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE
OR IN PART, IN OR INTO THE UNITED STATES
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Guernsey, 23 April 2019
AXA IM has published the Volta Finance Limited
(the “Company” or “Volta Finance” or “Volta”) monthly report for
March. The full report is attached to this release and will be
available on Volta’s website shortly (www.voltafinance.com).
PERFORMANCE and PORTFOLIO
ACTIVITY
In March, Volta’s NAV* total return performance
was +0.5%, bringing the YTD performance to 4.0% after a volatile
end to 2018.
Volta paid a quarterly dividend (€0.15 per
share) on the 28th March (the ex-dividend date was the 7th
March).
This positive performance was driven mainly by
the good performance of bank balance sheet transactions (+0.7% for
the month) and of CLO debt tranches (+0.6%). The performances of
Volta’s other asset classes in local currencies were: -0.2% for CLO
Equity tranches; +0.7% for Cash Corporate Credit deals; and +0.4%
for ABS.
As at the end of March, Volta was fully invested
having purchased three new positions (1 Bank Balance Sheet
transaction and 2 CLO Equity positions, one in Euro and one in USD)
for a total of the equivalent of €24.2m. On average, using market
standard assumptions, the projected yield of such purchases was
12.6%. Some of these purchases have a settlement in April,
explaining why the cash position of Volta at the end of March was
negative (on a trade date basis not on a settlement date
basis).
At the end of March, Volta still had exposure to
a CLO warehouse, which does not carry any more credit risk as the
underlying CLO equity has been priced. The realized IRR on this
warehouse is to be confirmed shortly (after the very last
settlement in April) but it should likely be between 25 and
30%.
Being at the end of the first quarter of this
year, it makes sense to reassess our view for 2019. What we
observed, almost everywhere in the credit markets and it is even
more true in structured finance, is that, on average, the maturity
curve and the credit curve are very steep. For CLO debt tranches it
has been rare to see such a steep maturity curve (same rating
assets are yielding far more with a long maturity than with a mid
to short term maturity). This situation characterizes periods in
which investors, are globally cautious in the way they deploy
capital (avoiding long credit duration instruments and the most
sensitive ones).
This situation is very encouraging for the rest
of the year even though we continue to think that it is near the
end of the economic and credit cycles and that at some point in
time more volatility will come back. The fact that investors are
cautious limits the probability of a brutal rise in volatility in
the coming months/quarters. More and more we think that the
probability of having in 2019 a second spike of volatility like the
one we had in Q4 2018 is declining. This overall cautiousness makes
us a bit more comfortable deploying all the capital (balancing
risks) and avoiding having too much cash.
We continued increasing our CLO equity tranche
exposure and reducing CLO debt tranches as the CLO equity tranches
are already benefiting from the fact that spreads stopped
tightening in loan markets (we have noticed for some months that
the CLO managers we selected have been able to increase the WAS
(Weighted Average Spread) of the underlying loan pools, generating
higher cash flows to the CLO Equity positions).
In March, Volta generated the equivalent of
€0.2m in interest and coupons net of repo costs (non-Euro amounts
translated into Euro using end-of-month cross currency rates). This
brings the total cash amount generated during the last six months
in terms of interest and coupons to €19.6m.
As at the end of March 2019, Volta’s NAV was
€287.8m or €7.87 per share. The GAV stood at €326.3m.
*It should be noted that approximately 11.2% of
Volta’s GAV comprises investments for which the relevant NAVs as at
the month-end date are normally available only after Volta’s NAV
has already been published. Volta’s policy is to publish its own
NAV on as timely a basis as possible in order to provide
shareholders with Volta’s appropriately up-to-date NAV information.
Consequently, such investments are valued using the most recently
available NAV for each fund or quoted price for such subordinated
note. The most recently available fund NAV or quoted price was for
6.9% as at 28 February 2019, 2.9% as at 31 December 2018 and for
1.4% as at 28 September 2018. ** “Mark-to-market variation” is
calculated as the Dietz-performance of the assets in each bucket,
taking into account the Mark-to-Market of the assets at month-end,
payments received from the assets over the period, and ignoring
changes in cross currency rates. Nevertheless, some residual
currency effects could impact the aggregate value of the portfolio
when aggregating each bucket.
CONTACTS
For the Investment Manager
AXA Investment Managers Paris
Serge Demay
serge.demay@axa-im.com
+33 (0) 1 44 45 84 47
Company Secretary and
Administrator
BNP Paribas Securities Services S.C.A, Guernsey Branch
guernsey.bp2s.volta.cosec@bnpparibas.com +44 (0) 1481
750 853
Corporate Broker Cenkos Securities plc Andrew
Worne
Oliver Packard
Sapna Shah
+44 (0) 20 7397 8900
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ABOUT VOLTA FINANCE LIMITED
Volta Finance Limited is incorporated in
Guernsey under The Companies (Guernsey) Law, 2008 (as amended) and
listed on Euronext Amsterdam and the London Stock Exchange's Main
Market for listed securities. Volta’s home member state for the
purposes of the EU Transparency Directive is the Netherlands. As
such, Volta is subject to regulation and supervision by the AFM,
being the regulator for financial markets in the Netherlands.
Volta’s investment objectives are to preserve
capital across the credit cycle and to provide a stable stream of
income to its shareholders through dividends. Volta seeks to attain
its investment objectives predominantly through diversified
investments in structured finance assets. The assets that the
Company may invest in either directly or indirectly include, but
are not limited to: corporate credits; sovereign and
quasi-sovereign debt; residential mortgage loans; and, automobile
loans. The Company’s approach to investment is through vehicles and
arrangements that essentially provide leveraged exposure to
portfolios of such underlying assets. The Company has appointed AXA
Investment Managers Paris an investment management company with a
division specialised in structured credit, for the investment
management of all its assets.
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ABOUT AXA INVESTMENT
MANAGERS
AXA Investment Managers (AXA IM) is a
multi-expert asset management company within the AXA Group, a
global leader in financial protection and wealth management. AXA IM
is one of the largest European-based asset managers with 766
investment professionals and €759 billion in assets under
management as of the end of June 2018.
*****
This press release is published by AXA
Investment Managers Paris (“AXA IM”), in its capacity as
alternative investment fund manager (within the meaning of
Directive 2011/61/EU, the “AIFM Directive”) of Volta Finance
Limited (the "Volta Finance") whose portfolio is managed by AXA
IM.
This press release is for information
only and does not constitute an invitation or inducement to acquire
shares in Volta Finance. Its circulation may be prohibited in
certain jurisdictions and no recipient may circulate copies of this
document in breach of such limitations or restrictions. This
document is not an offer for sale of the securities referred to
herein in the United States or to persons who are “U.S. persons”
for purposes of Regulation S under the U.S. Securities Act of 1933,
as amended (the “Securities Act”), or otherwise in circumstances
where such offer would be restricted by applicable law. Such
securities may not be sold in the United States absent registration
or an exemption from registration from the Securities Act. Volta
Finance does not intend to register any portion of the offer of
such securities in the United States or to conduct a public
offering of such securities in the United States.
*****
This communication is only being
distributed to and is only directed at (i) persons who are outside
the United Kingdom or (ii) investment professionals falling within
Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the “Order”) or (iii) high net
worth companies, and other persons to whom it may lawfully be
communicated, falling within Article 49(2)(a) to (d) of the Order
(all such persons together being referred to as “relevant
persons”). The securities referred to herein are only available to,
and any invitation, offer or agreement to subscribe, purchase or
otherwise acquire such securities will be engaged in only with,
relevant persons. Any person who is not a relevant person should
not act or rely on this document or any of its contents. Past
performance cannot be relied on as a guide to future
performance.
*****
This press release contains statements
that are, or may deemed to be, "forward-looking statements". These
forward-looking statements can be identified by the use of
forward-looking terminology, including the terms "believes",
"anticipated", "expects", "intends", "is/are expected", "may",
"will" or "should". They include the statements regarding the level
of the dividend, the current market context and its impact on the
long-term return of Volta Finance's investments. By their nature,
forward-looking statements involve risks and uncertainties and
readers are cautioned that any such forward-looking statements are
not guarantees of future performance. Volta Finance's actual
results, portfolio composition and performance may differ
materially from the impression created by the forward-looking
statements. AXA IM does not undertake any obligation to publicly
update or revise forward-looking statements.
Any target information is based on
certain assumptions as to future events which may not prove to be
realised. Due to the uncertainty surrounding these future events,
the targets are not intended to be and should not be regarded as
profits or earnings or any other type of forecasts. There can be no
assurance that any of these targets will be achieved. In addition,
no assurance can be given that the investment objective will be
achieved.
The figures provided that relate to past
months or years and past performance cannot be relied on as a guide
to future performance or construed as a reliable indicator as to
future performance. Throughout this review, the citation of
specific trades or strategies is intended to illustrate some of the
investment methodologies and philosophies of Volta Finance, as
implemented by AXA IM. The historical success or AXA IM’s belief in
the future success, of any of these trades or strategies is not
indicative of, and has no bearing on, future results.
The valuation of financial assets can
vary significantly from the prices that the AXA IM could obtain if
it sought to liquidate the positions on behalf of the Volta Finance
due to market conditions and general economic environment. Such
valuations do not constitute a fairness or similar opinion and
should not be regarded as such.
Editor: AXA INVESTMENT MANAGERS
PARIS, a company incorporated under the laws of France, having its
registered office located at Tour Majunga, 6, Place de la Pyramide
- 92800 Puteaux. AXA IMP is authorized by the Autorité des Marchés
Financiers under registration number GP92008 as an alternative
investment fund manager within the meaning of the AIFM
Directive.
*****
- March 2019 Monthly Press Release Final
- Volta - Monthly Report - March 2019
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