Volta Finance (VTA) has agreed an alteration of the fee structure with its investment manager, AXA Investment Managers Paris as part of an amended and restated investment management agreement that takes effect from 31 March 2024. Under the revised arrangements, the manager will be entitled to receive a management fee equal to the aggregate of:
(i) an amount equal to 1.5 per cent per annum of the lower of the net asset value (NAV) and EUR 236m (as opposed to the previous threshold which was EUR 300m); and
(ii) if the Net Asset Value is greater than EUR 236m, an amount equal to 1.0 per cent per annum of the amount by which the Net Asset Value exceeds EUR 236m.
The management fee will continue to be calculated for each six-month period ending on July 31 and January 31 of each year on the basis of the VTA’s NAV as of the end of the preceding period and payable semi-annually in arrears. The management fee will continue to be subject to reductions for investments in AXA IM Managed Products as set out in VTA’s existing investment guidelines.
The manager will be entitled to receive a performance fee of 20 per cent of any NAV outperformance over an 8 per cent hurdle on an annualised basis, subject to a high water mark, which will be equal to the latest audited NAV per share multiplied by (1+8%)) and adjustments for dividends paid, share issuances, redemptions and buybacks. The performance fee will be calculated and paid annually in respect of each 12 month period ending on 31 July. However, performance fees payable to AXA IMP in respect of any Incentive Period shall not exceed 4.99% of the NAV at the year end.
VTA’s board says that it is delighted to have reached agreement with AXA IMP on lowering the threshold of the tiered management fee and enhancing the annual performance fee structure. It comments that the management fee amendment will bring an immediate benefit to shareholders and will see a notable reduction should the Company grow. In its view, the revised performance fee arrangement will continue to provide an alignment of shareholders’ interests along with AXA IMP’s interests enhanced with an improved High Water Mark. The Board believes the changes are in the interests of all shareholders and should allow the Company to appeal to new investors.