Volta Finance Investors - VTA

Volta Finance Investors - VTA

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Stock Name Stock Symbol Market Stock Type
Volta Finance Limited VTA London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 5.225 08:00:00
Open Price Low Price High Price Close Price Previous Close
5.225 5.225 5.225 5.225 5.225
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Industry Sector
GENERAL FINANCIAL

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Top Posts
Posted at 15/6/2022 09:31 by cerrito
at least for a sterling based investor like me I am benefiting from the weakness of sterling against both the dollar and the euro
Posted at 04/6/2022 18:03 by cerrito
Just found out that there will be a zoom investor call with the VTA manager organized by Hardman this Thursday at 3 which should be interesting.
hxxps://www.research-tree.com/events/hardman-co/hardman-talks-volta-finance-manager-s-presentation-and-q-a/964

Posted at 14/4/2022 09:18 by davebowler
Liberum on Fair Oaks Income

1.7%% NAV TR YTD

Mkt Cap £194m | Share price $0.63 | Prem/(disc) -4.6% | Div yield 16.0%

Event

Fair Oaks Income has released its annual results to 31 December 2021, with the previously reported NAV per share of $0.67 representing a NAV total return of +22.7% in 2021. FAIR has also published its monthly NAV to 31 March 2022, with the $0.65 per share value representing a +0.3% NAV total return in March (+1.7% YTD).


Liberum view

Despite ongoing potential for NAV volatility in the near-term, we regard the 16% dividend yield as attractive. We note that the credit performance of the portfolio has been strong and there is significant headroom on overcollateralisation tests. Distributions to the portfolio from debt investments remain healthy and CLO equity can potentially benefit from a widening in loan spreads as the CLOs financing cost is fixed and any increase in portfolio spread will benefit CLO equity investors.

Posted at 17/2/2022 14:55 by cwa1
Hardman research:-

https://www.hardmanandco.com/research/corporate-research/what-volta-brings-to-investors/

Valuation: Volta trades at a double discount: its share price is at a 14% discount to NAV, and we believe its mark-to-market NAV still includes a further sentiment-driven discount (5%-10%) to the present value of expected cashflows. Volta targets an 8% of NAV dividend (9.7% 2022E dividend yield on current share price).


Risks: Credit risk is a key sensitivity. We examined the valuation of assets, highlighting the multiple controls to ensure its validity, in our initiation note, in September 2018. 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 there could be sentiment-driven share price volatility. Long-term returns have been good: ca.9% p.a. (dividend reinvested basis) since initiation. With above-average returns on recent reinvestments, the portfolio’s past six-month cashflow (annualised) yield is 15.5%. We expect near 2x 2022 dividend cover.

Posted at 30/11/2021 11:30 by cwa1
https://www.hardmanandco.com/research/corporate-research/simple-simon-says/

In this note, we explore three aspects of Volta’s portfolio, highlighting their simplification – simplified. Firstly, unless there is a compelling, opportunistic case, new investments will be in CLO structures only, and not in other structured finance instruments. The asset mix is being simplified. Second, there should be an increased weighting to AXA IM managed CLO vehicles, reflecting good performance and lower fees. The manager mix is being simplified. Third, we detail why CLOs are, at heart, simple cashflow structures, which should be viewed as such, free from the terminology that may confuse a clear story.

Simpler portfolio: Over recent years, Volta has seen an increasing weight to CLO investments. It has been agreed with the board to put into policy that reinvestment, when non-CLO assets mature, will be into CLOs, making the mandate much clearer. The portfolio will be more focused, as assets roll over.
Greater AXA IM managed CLO investments: AXA IM has been awarded “Best US CLO Manager of the Year” (in 2021, by Credit Flux), highlighting AXA IM’s performance. Volta is also not paying management fees on AXA IM CLO positions, and, over time, AXA IM CLOs are expected to be a higher share of the portfolio.
Valuation: Volta trades at a double discount: its share price is at a 15% discount to NAV, and we believe its mark-to-market NAV includes a further sentiment-driven discount (5%-10%) to the present value of expected cashflows. Volta targets an 8% of NAV dividend (9.8% 2022E yield on current share price).
Risks: Credit risk is a key sensitivity. We examined the valuation of assets, highlighting the multiple controls to ensure its validity, in our initiation note, in September 2018. 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 there could be sentiment-driven share price volatility. Long-term returns have been good: c.9% p.a. (dividend reinvested basis) since initiation. With above-average returns on recent reinvestments, the portfolio’s past six-month cashflow (annualised) yield is c.20%. We expect near 2x 2022 dividend cover.

Posted at 16/9/2021 12:24 by davebowler
Liberum on FAIR;
Fair Oaks Income

High cash generation

Mkt Cap £198m | Share price $0.67 | Prem/(disc) 0.3% | Div yield 14.8%

Event

Fair Oaks Income's NAV per share as at 31 August 2021 was $0.673, representing a 0.3% NAV total return in the month (+18.7% YTD). US and European loan markets rose by 0.5% and 0.4% respectively during the month. The trailing 12-month default rate in the US loan market has fallen to its lowest level since August 2011. European default rates also remain low at 1.1%.


The CLO equity positions have continued to generate strong cash flows in recent quarters. The current valuation of the CLO equity positions implies relatively low cash flow multiples. The average cash flow multiple of the CLO equity tranches is 3.4x based on the latest distribution, compared to 4.8x in January 2020.


Liberum view

FAIR's portfolio has generated strong cash flows in H1 2021 and we see this as a compelling entry point for a fund offering a 15% dividend yield and double-digit prospective NAV returns. The benign default environment and tightening in CLO spreads has created a favourable environment for CLO equity performance. Based on current rolling default rates, the modelled return for FAIR's portfolio is 17%. The medium-term outlook for defaults is favourable with only 5% of the US loan market maturing between now and the end of 2023. Fair Oaks is particularly well-placed to capitalise on these conditions as a control CLO equity investor.

Posted at 16/8/2021 08:05 by davebowler
Liberum on FAIR-

Loan default rates continue to fall

Mkt Cap £198m | Share price $0.68 | Prem/(disc) -3.0% | Div yield 13.3%

Event

Fair Oaks Income's NAV per share as at 31 July 2021 was $0.696, representing a 1.4% NAV total return in the month (+18.3% YTD). CLO and loan markets were broadly unchanged in July. US and European loan markets rose by 0.0% and 0.1% respectively during the month.

In terms of fundamentals, trailing 12-month loan default rates fell from 1.2% to 0.6% in the US and increased marginally from 1.1% to 1.2% in Europe. The default outlook for bank loans also remains encouraging, with the distressed ratio (loans trading below 80c) at 1.1% in the US and 1.2% in Europe. CLO issuance remains at elevated levels, with YTD 2021 volumes tracking well ahead of prior year.

The Fair Oaks Master Fund received $18.7m of distributions in July, significantly ahead of the $11.1m received in the same month last year. Distributions have benefitted from the reduced exposure to lower coupon CLO mezzanine notes and the strong cash-flows from CLO subordinated investments. Based on current default rates, Master Fund cash flows for Q2 2022, when the first distributions for the new CLO subordinated note investments are expected, are projected to be $24m. The weighted average over-collateralisation test headroom for Master Fund’s CLO subordinated investments has increased from 3.5% in December 2020 to 4.0% at the end of July.


Liberum view

July was another favourable month for CLO funds, with loan default rates continuing to trend downwards and compressing AAA spreads present opportunities to significantly reduce the cost of funding. Fair Oaks is particularly well-placed to capitalise on these conditions as a control CLO equity investor. Over recent months, Fair Oaks has realised significant gains on CLO mezzanine positions and has recycled capital into a number of new CLO equity investments. The flexible investment strategy enables the company to invest across the various different parts of the CLO structure to take advantage of relative value opportunities. Several positions have been sold to date, realising returns of 31%-52%. The upside on many of the remaining positions is capped from refi/reset activity in the market and the proceeds can be recycled into primary CLO equity positions, offering attractive returns in a benign default environment. Importantly, all of FAIR's CLO equity investments are control investments, enabling the manager to generate additional returns through cost reductions, portfolio selection and optimal call timing. We see this as a compelling entry point for a fund offering a 13% dividend yield and strong prospective NAV returns.

Posted at 15/8/2021 12:58 by cerrito
Congrats to them for a good July and I note increase in cash despite paying a dividend. Thinking in rather a vague way of buying more...as a £ based investor do I want more Euro denominated assets??
Posted at 13/7/2021 19:47 by skyship
Hardly likely surely - At 610c the discount is 16.21% and the yield on a 56c dividend = 9.18%. But that dividend is based upon the NAV - so will be rising further.

Unknown and unloved; but heck, I'm being paid a good whack whilst waiting for new investors to discover VTA!

Posted at 16/6/2021 08:53 by davebowler
Liberum on FAIR-
Event

Fair Oaks Income Fund's NAV per share at 31 May 2021 was $0.678, representing a 5.7% NAV total return in the month (+15.3% YTD). In addition to positive loan markets, NAV performance was boosted by upside from recent reset activity across the CLO equity tranches:

FOLF II - the reset of FOLF II priced in May. The previous structure had relatively low leverage and a weighted average coupon of Euribor +2.41%. The coupon has reduced to Euribor +1.68% and the reinvestment period has been extended by 4.5 years. The addition of BB and B rated tranches to the structure will enable the return of €19.5m of Master Fund II's initial €47m equity investment. The overall value of the position has risen by 36% in the month.
AIMCO 2017-A - the pricing of the AIMCO 2017 reset completed in March. The reset resulted in a reduction in the cost of funding of 24 bps and a five year extension to the investment period. The price of the CLO equity tranche has risen from 48 at the end of February to 81 currently. The valuation is backed up by transactional evidence. A $5.5m position in AIMCO 2017-1 traded in May, with a cover (or second highest bid) of 81.

The manager has crystallised gains on a significant portion of CLO mezzanine tranches, reducing the total allocation to mezzanine tranches to 18% of the portfolio (28% in the prior month). Part of the proceeds have been reinvested in the equity tranche of Allegro XIII, a primary US CLO (target return of 15-17%). Master Fund II has committed to two other US CLO control equity investments.

Liberum view

We have published a note on FAIR, outlining our expectation of strong returns across the portfolio. Two factors are the key drivers of CLO equity returns – loan default rates and the arbitrage spread of the loan pool over the cost of financing. In both instances, the outlook appears very favourable. Loan default rates continue to trend downwards and compressing AAA spreads present opportunities to significantly reduce the cost of funding. FAIR is well-placed to capitalise on these conditions as a control CLO equity investor. We see this as a compelling entry point for a fund offering a 13% dividend yield and strong prospective NAV returns.

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