New York State Common Invests in a Fund-of-One at SVPGlobal
The distressed debt and private equity manager has doubled its assets under management since 2020.
Nearly a year after he told Institutional Investor that the coronavirus pandemic presented a “once-in-a-decade” opportunity in distressed debt, SVPGlobal’s founder and chief investment officer Victor Khosla is still finding opportunities to invest.
The New York State Common Retirement Fund is too. In September, the pension fund allocated $500 million to a fund-of-one vehicle through SVPGlobal’s credit opportunities platform.
And that’s just the tip of the iceberg. So far this year, the pension fund has deployed nearly $3.8 billion into credit investment strategies, $1.25 billion of which was deployed in September alone, its monthly investment reports show. As of June 30, 2021, the pension fund had assets totaling $268.3 billion.
The September investments included $250 million for Francisco Partners’ second credit fund, $250 million toward Blackstone’s fourth capital opportunities fund, $125 million as a co-investment alongside that Blackstone fund, and, of course, the SVPGlobal fund.
Although New York State Common’s spokesperson declined to comment on the news, Khosla spoke with Institutional Investor about his view of the debt and private equity markets — and what SVPGlobal is doing next.
“There are some interesting deals which we have worked on, and we are in the middle of some sales processes too,” Khosla said by phone Tuesday. “It’s not all buy, buy, buy. There continues to be a focus on buying, but also an increased focus on monetization.”
He pointed out that while SVPGlobal may be known for its distressed debt business, that isn’t all that the firm does.
“Our roots are in distressed debt, but 45 percent of our investments are made in much more specialty sectors,” Khosla said. These sectors include aviation, infrastructure, power generation, and real estate, he added.
This, according to Khosla, is part of what separates SVPGlobal from other funds. “We have the capabilities to take control of businesses through restructuring,” he said. “We own one of the larger aviation management companies so we can manage the collateral when we buy planes.”
For instance, one of SVPGlobal’s recent deals was a debt-to-equity restructuring of Swissport International, a large airport services and cargo provider.
“A lot of people have chosen to build a new real estate or aviation or infrastructure business,” Khosla said. “We’ve chosen to run it through a fund rather than a distinct business. When the opportunity strikes, we’re able to take advantage of it in a way.”
The firm has been on a growth trajectory, buying up attractive assets, adding to its team, and raising capital, including New York State Common’s fund-of-one. Since October 2020, the firm’s assets under management have grown from $9.8 billion to $18 billion.
According to Khosla, SVPGlobal has raised close to $5 billion so far in 2021. The organization has added 10 people to its investment team as well. “In any way that you measure what we’ve been doing, you get a sense of growth,” Khosla said.