CQS’s Pappas Sees 'Sell Button' Creating Distressed Opportunities

The video discusses distressed investing in a low default environment, highlighting opportunities in non-performing loans and the growth of the credit market since the financial crisis. It examines the economic outlook, noting central banks' accommodative policies and the potential for future downturns. Vulnerable industries like oil and gas and retail are identified, and the impact of passive management on market dynamics is explored, emphasizing the importance of following investments in a volatile market.

What is the primary focus of Nick's investment strategy in the current market environment?

• Non-performing loans in Europe

• High-yield bonds in the US

• Real estate in South America

• Equity investments in Asia

What is the current average leverage on deals compared to 2009?

• 3.99 times, now 5.2 times

• 3.99 times, now 4.5 times

• 4.5 times, now 5.2 times

• 5.2 times, now 6 times

Which industries are identified as most vulnerable to distress?

• Technology and healthcare

• Oil and gas, and retail

• Telecommunications and media

• Finance and insurance

What is a significant factor contributing to extreme selling in the current market?

• High interest rates

• Lack of passive management expertise

• Rising inflation rates

• Increased government regulations

How does passive management typically respond to restructuring or liquidity events?

• By increasing investments

• By seeking expert advice

• By holding their positions

• By hitting the sell button