Victor Khosla Sees Distressed Opportunities in High Yield

The video discusses the current distressed market opportunities, highlighting the high yield default rate and its implications. It explores creditor disputes, restructuring, and the role of private equity. The analysis compares US and European markets, noting the slower recovery in Europe. Recovery rates are expected to be lower due to private equity's influence. The buy side faces challenges but sees new opportunities. The focus is on sectors like industrial businesses, avoiding those undergoing structural changes.

What is the expected high yield default rate for 2020?

• 2-3%

• 10%

• 15%

• 5%

How does the US typically handle financial crises compared to Europe?

• The US takes longer to recover.

• The US is slower in restructuring.

• The US is more efficient in creative destruction.

• The US relies more on government bailouts.

What is the expected duration of the European market cleanup compared to the US?

• Unpredictable and volatile.

• Shorter and less intense.

• Similar in duration.

• Longer and more extensive.

Why are recovery rates expected to be lower in the current cycle?

• Due to higher interest rates.

• Due to a lack of distressed opportunities.

• Because private equity investors have more time to maneuver.

• Because of increased government intervention.

What has been the performance of the buy side in the distressed market over the last 6-7 years?

• Consistent losses.

• Exceptional growth.

• Complete market exit.

• Modest marginal performance.

Which sectors are considered tough to invest in according to the discussion?

• Airlines and retail.

• Energy and utilities.

• Technology and healthcare.

• Finance and insurance.

What is the focus of investment for the speaker's firm?

• Old economy and industrial businesses.

• Real estate and construction.

• Cryptocurrency markets.

• High-tech startups.