The prices of loans that could be affected by recent events in the Middle East (e.g. surge in energy prices) have fallen. Additionally, concerns related to AI disruption following Anthropic’s legal AI tool launch have penalised loans granted to software companies. In this note, we reiterate why Volta’s exposure is limited, noting i) the protections embedded within CLO vehicles, ii) the manager’s track record of better-than-CLO market risk management, driven by CLO manager selection and portfolio construction. In our view, Volta’s modest share price reaction to the Anthropic news reflects its below-average risk exposure model.
