Volta Finance Limited (LON:VTA) is the topic of conversation when Mark Thomas, Analyst at Hardman & Co joins DirectorsTalk. Mark explains why the report is sat behind a disclaimer, what his note was about, the key attractions and risks, how Volta generates the cash for high dividends and what Mark discovered by diving deep into the financials.
Volta Finance’s investment objectives are to seek to preserve capital across the credit cycle and to provide a stable stream of income to its Shareholders through dividends that it expects to distribute on a quarterly basis. Subject to the risk factors that are described in the Summary Document below and in the Prospectus dated 4 December 2006 below, it seeks to attain its investment objectives predominantly through investment in a diversified portfolio of structured finance assets. Volta’s investment strategy focuses on direct and indirect investments in, and exposures to, a variety of assets selected for the purpose of generating cash flows for the Company. The assets that Volta may invest in either directly or indirectly include but are not limited to: corporate credits; sovereign and quasi-sovereign debt; residential mortgage loans; commercial mortgage loans; automobile loans; student loans; credit card receivables; leases; and debt and equity interests in infrastructure projects (the “Underlying Assets”).
Volta’s approach to investment is through vehicles and arrangements that essentially provide leveraged exposure to portfolios of such Underlying Assets. In this regard, Volta reviews the investment strategy adopted by AXA Investment Managers Paris (the “Investment Manager” or “AXA IM”) on a quarterly basis. The current investment strategy is to concentrate on the following asset classes: CLO; Synthetic Corporate Credit; Cash Corporate Credit; and ABS. There can be no assurance that Volta will achieve its investment objectives.
