VICTOR KHOSLA

Khosla came from India, earned a commerce degree at Delhi University, then moved to the US for graduate school. He started at Booz Allen in strategic planning, then joined Citibank in the late 1980s.

Through the 1990s he built and ran distressed trading desks at both Citibank and Merrill Lynch, creating two leading proprietary trading operations. Before starting his own firm he served as president of Cerberus Capital Management, one of the biggest distressed and private-equity shops around.

In 2001 he founded Strategic Value Partners. He grew it to about 200 employees with offices in Greenwich, London and Tokyo, running roughly $20 billion and having invested more than $48 billion since inception.

Strategic Value Partners (SVPGlobal), formerly Cerberus Capital, Merrill Lynch and Citibank

Khosla runs opportunistic credit, but with a private-equity twist. Instead of just trading distressed debt, he buys the beaten-down bonds and loans of troubled companies with the goal of taking control.

Then his team tries to improve or fully transform those businesses operationally, not just flip the paper. He has pushed SVP beyond plain distressed into private debt, event-driven bets and hard assets like real estate, power plants and aircraft.

The aircraft trades are lumpy, since he demands a high return and only jumps in when the cycle is right. His edge is not begging Wall Street for trades, it is owning and fixing the underlying business.

The firm itself is the win. Khosla started SVP in 2001 and grew it roughly five-fold over the past decade to around $20 billion, deploying more than $48 billion since inception.

The strategy shines in crises. When companies collapse, SVP buys their debt cheap, takes control, and rebuilds, turning wrecks into recoveries across real estate, power, aircraft and industrial businesses.

Khosla keeps his specific losers out of public view, so a defining error is hard to confirm. The structural risk in his approach is that taking control of troubled companies means you own the problem, not just a slice of paper you can sell.

If an operational turnaround fails, there is no quick exit. He also flagged in early 2020 that it was not yet time to buy, with more downside to come, a reminder that even he can be early on a cycle.

Khosla's core belief is his own quote. There is no such thing as toxic assets, only toxic prices and toxic debt levels.

In other words, almost any business is worth owning at a low enough price with the debt fixed. He thinks distressed peers give up returns by hunting in packs, relying too much on Wall Street for trades, and not caring enough about the companies they end up controlling.

His model is to buy at a good price and then transform the business operationally, treating himself as an owner rather than a trader.

Khosla was born and raised in India before moving to the United States for graduate school. He keeps his family life private.

He supports Pratham USA, a nonprofit working on childhood education in India.

Khosla earned a bachelor of commerce with honors from Delhi University, then a masters in economics from Vanderbilt University, and an MBA from the University of Chicago. The Chicago MBA is telling, since it is a school obsessed with prices and markets, which is exactly the lens he brings to distressed investing.