Deals
Distressed-Debt Funds Take Breather Waiting for Next Crisis
- Investing in Puerto Rico, energy debt boost returns in 2018
- ‘It’s a good time to monetize,’ says SVP’s Victor Khosla
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Distressed-debt investors, which rode winning bets on Puerto Rico and energy companies this year to beat all other hedge-fund strategies, are hitting the pause button as a booming U.S. economy and narrow yield spreads on junk debt make bargains scarce.
“It’s a good time to monetize,” said Victor Khosla, founder of the $8.5 billion U.S. fund Strategic Value Partners LLC, which invests in distressed debt. “When high-yield spreads get to be this tight, when markets are this strong, you’re not buying as much as you’re selling.”