Volta Finance Share Discussion Threads

[horndean eagle] 24/10/2018 21:12

Market volatility is ultimately good for clo equity as long as they manage to keep defaults in check. A good wobble would do them good. The problem they have is their shares are at the mercy of poor liquidity which means they would get whacked. A good opportunity to top up but not when you have a huge slug already.

[hpcg] 24/10/2018 15:20

Yieldsearch - wise words. High returns are an indication of high risk, even more so in fixed interest than equities as the downside is that much more catastrophic. This end of the business cycle is the wrong time to be in high risk lending IMO. Some commentators are starting to get nervous as a result of Eurozone PMI readings; this isn't for me until they start surprising to the upside.

[yieldsearch] 23/10/2018 22:51

NR/NA = Non rated/ not applicable. Typically for the VTA assets that are not rated, most likely equity piece of CLO or regulatory arbitrage tranche.

A CLO is a company buying loans and issuing notes. Notes are rated from AAA to BB or B, and the company can usually issue a large part of debt (if the company buy 100 of loan, it could issue likely 90 of debt rated AAA to BB. the 10 remaining is the equity , and because it is very risky, it cant be rated). It is most likely this 10 that is the NR portion of the portfolio. You will see also in this example that you are facing potential credit loss on 100 , and the amount of equity is 10: massive gearing.


A rating breakdown is to some extent providing you a indication of risk: if all the assets are NR not rated, this would imply that they are very risky and should justify a high yield on those assets and also large dividend on the VTA fund. This also imply that you trust the underlying rating.

I like VTA and the investment manager but reduced my exposure. FAIR is good, CIFU i have stayed away from blackstone.

[cerrito] 23/10/2018 21:24

Thanks Yieldsearch for posting that article.
I wonder if the weakness of VTA in last few days connected with fact that as they say in their latest monthly for the first time for many years CLO equity tranches are 30%+ of their GAV.
I also see that VTA in the last few months have followed FAIR but not CIFU and enclosed a ratings breakdown. I see that 58% is NR/NA and 38% BB,
Silly question>Anyone know why more than 50% of portfolio is NR/NA??
Thanks

[horndean eagle] 23/10/2018 09:14

Lack of liquidity causing usual problems again for VTA. Back to year lows. The company should really have a discount control mechanism in place. Otherwise could see some further large spikes lower.

[yieldsearch] 18/10/2018 20:41

https://www.bloomberg.com/news/articles/2018-10-18/investors-on-the-clo-front-line-get-cold-feet-as-returns-dry-up

[stemis] 16/9/2018 21:30

Research note is good. I like some exposure in this sector and hold shares in AGNC, TICC and CIFU. As CIFU are winding up (after a decent 10%+ pa return over 6 years), at first glance VTA looks like a good place to put the cash.

[horndean eagle] 16/9/2018 15:10

Apologies. Its share price return I was referring to They are assuming you re-invested dividends at prevailing price and hence performance returns overstated because share price got smashed up heavily and so prevailing returns amplified.

Glad to see they are pushing themeslves a little more by dragging in paid for research. They still need to do more. Discount is way out of line with peers.

[skyship] 15/9/2018 12:10

HE - "These NAV performance figures are dodgy. They assume dividends re-invested."

Could you explain pls - doesn't seem to make sense!

[puffintickler] 15/9/2018 08:11

Doubled up my holding again in two bits since June which has brought me back to break-even (ex divis). Now my largest investment trust. As long as those divis keep coming the discount and share price can stay where they are as far as I am concerned.

[horndean eagle] 14/9/2018 20:06

These NAV performance figures are dodgy. They assume dividends re-invested. If the share price plunges by 70-80percent and your paying dividends then of course your re-invested return is going to be pretty good.

[badtime] 14/9/2018 08:21

Recovered nicely from ex div

[davebowler] 13/9/2018 08:56

Liberum;
Event

Volta has released an early NAV estimate for August. NAV per share rose by 1.5% to €8.48 at 31 August 2018 (July 2018: €8.36). We estimate US Dollar appreciation added c.0.2% to NAV performance in the month.

Liberum view

Volta has an excellent track record and has been one of the best performing funds in the CLO sector. We calculate a YTD and 12-month NAV TR return of 5.7% and 8.6%, respectively. The discount has, however, remained persistently wide over recent years. The company recently introduced a sterling quote on the LSE in addition to the existing Euro quotes on the LSE and Euronext. In our view, the company could do more to address the discount. We believe the Amsterdam listing should be cancelled as liquidity is currently split between London and Amsterdam. In addition, transparency on the share register in Amsterdam is limited. The shares trade on a -15.3% discount to NAV compared to an average -1.8% discount for peers.

[davebowler] 10/9/2018 16:02

Extract from Hardman Research;


Volta discount is highest discount to NAV in sub-sector.
Immediate peers trade, on average, at par (6% premium
excluding CIFU).
► Since August 2014, Volta has the best NAV performance of
the group (reported currency basis) and has a more flexible
mandate to adapt to dynamic market conditions.
► Against a broader peer group of debt funds, Volta’s
discount is even more stark.

► Since inception, Volta has delivered higher share price returns than the
following major benchmarks: S&P 500, MSCI European (total return, US High
Yield Bonds (H0A0 Index); US Loans Market (S&P LSTA Index); European High
Yield Bonds (HE00 Index); and the European Loans Market (S&P ELLI Index). In
any period, there will be volatility as Volta provides non-correlated returns with
equity markets(correlation coefficient 0.43 with S&P 500, 0.16 with AEX and 0.1
with FTSE 100), but over time it has delivered superior returns.

[skyship] 06/9/2018 07:16

Needs to break 720 to confirm a nice Reverse Head & Shoulders and a target of c765

[cwa1] 06/9/2018 07:11

Oh and XD today I note, pay 27/9.

[joe say] 06/9/2018 07:06

Cheers Dendria - I'll read the first few chapters tonight !

[cwa1] 06/9/2018 06:53

Thanks for that Hardman research note dendria, interesting.

[rcturner2] 06/9/2018 06:38

I have taken my profit here and sold up.

[skyship] 06/9/2018 06:23

dendria - excellent - thnx for that

[dendria] 05/9/2018 17:42

Quite a chunky research note out from Hardman today:

hxxp://hardmanandco.com/research/companies/volta-finance-ltd

[holts] 05/9/2018 14:32

have no idea if the current manager was around in 2007/8 if so let us hope they did learn a valuable lesson

[yieldsearch] 03/9/2018 11:50

thank you for sharing. clearly a sign of where we are in the credit cycle.
As soon as the music will stop, the NAV of the permanent capital vehicles will drop like a stone and very likely that there will be very limited liquidity to sell vta, fair, cifu, etc
I just dont know when the music will stop and therefore only have small exposure to those

[cerrito] 02/9/2018 21:43

Long article in today’s Sunday Telegraph on detiorating credit standards in the US loan market-and increase in cov lite loans caused by demand from investors with CLO funds. Cite figures that in 2012 24% of loans were cov lite and 2018 YTD 76% Quotes warnings from Moodys and IMF and comment that default stats and recovery rates will be far worse than what CLO issuers have been touting.
Fair points and the key is and always has been the credit skills of the Managers.