European leveraged loans generated healthy double-digit returns

Despite another challenging year for financial markets, European leveraged loans bucked the trend generating healthy double-digit returns. Here, we explore some of the key drivers behind the defensive nature of the loan universe and ask: through the many unknowns on the horizon, could European loans provide solace for investors in the year ahead?

Financial markets excel at pricing high probability, low impact events but they are invariably bad with high impact events, both before and after they occur. In contrast to the dominant, single major event that defined 2022, 2023 has been consistently upset by unanticipated occurrences: rampant, double-digit inflation, the collapse of reputable financial institutions like Credit Suisse and Silicon Valley Bank, the outbreak of a conflict between Israel and Hamas in Palestine, paralysing, polarised politics and the US sovereign debt ceiling debacle. 

Volta Finance Ltd (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.

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