Volta Finance (VTA) has announced its interim results for the six months ended 31 January 2025, which saw its NAV per share increase by 7.0% to €7.63 and the share price jump 18.3% to €6.15 over the six months to 31 January 2025. The company’s chairman, Dagmar Kershaw, noted that the rebound in the share price reflects a partial unwinding of the discount that had persisted despite solid underlying asset performance. However, she added that more work remains to close the gap fully. Volta’s investment manager, AXA IM, reported a total NAV return of 11.3% (non-annualised) over the period, building on the 7.7% return in the previous half. Strong cash generation continues to underpin the portfolio, with annualised yield on NAV running at 19%, supported by €28.1m of interest and coupon payments. Dividends of €0.295 per share were paid during the period.
The portfolio is now almost entirely focused on CLOs, with 99% of assets invested in CLO equity and debt across both the US and Europe. This streamlining is seen as a key driver of recent performance, allowing more focused portfolio management and greater transparency for investors. 59% of assets are in CLO equity and 32% in CLO debt, with the remainder in cash or other minor holdings.
New investments totalled €45m during the half year, including fresh CLO equity and debt tranches as well as continued exposure to warehouses. Sales, mainly of BB-rated debt and older equity positions, were used to lock in gains and reduce exposure to weaker credits.
Macro headwinds remain, particularly with rising geopolitical uncertainty following Donald Trump’s return to the White House and mounting trade tensions. However, loan defaults remain low – just 0.94% in the US and 0.17% in Europe – though Kershaw warned that rising use of liability management exercises (LMEs) may mask underlying stress.
Loan and CLO markets have been buoyant, with record refinancing activity and tight spreads. While this has slightly dented cashflow versus the prior period, yields remain strong. The projected gross yield of the portfolio is 12.4%, including 15% from equity and 11% from debt holdings.
Looking ahead, the manager sees 2025 as a year for active trading, with opportunities expected to emerge from volatility driven by trade policy shifts and ETF-related flows. Volta is expected to continue favouring primary market exposure and reinvesting CLOs to maintain cashflow and manage risk.
Volta’s outlook remains cautiously optimistic, with a focus on opportunistic asset rotation and maintaining flexibility across geographies and credit tiers. The board believes the trust’s structure and income profile remain attractive in the face of equity market volatility.
