After a protracted period of ultra-low global interest rates, which included historic rate cuts spurred by the economic threat of the COVID-19 pandemic, investors are bracing themselves for a new cycle of policy tightening by central banks. Against that backdrop of rising rates, they’re looking for ways to shore up their fixed-income allocations – and that includes senior loans.
Holzenthaler says he’s seen strong demand from senior loans this year coming from retail mutual funds, where investors are looking for income, and the institutional CLO (collateralized loan obligation) market, which is driven more by a need to avoid interest rate risk. Supply has been more constrained relative to what would be expected given the high level of investor interest, mainly due to issuer slowdown in the face of ongoing geopolitical risks that first erupted in February and March.
Volta Finance Limited (LON:VTA) is a closed-ended limited liability company registered in Guernsey. Volta’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.
