For investors facing incoming volatility from so many sides, the conditions can often feel chaotic, like tossing your money into a tornado.
That’s especially true when investors decide to invest in a company or sector in a state of transition. But of course, that’s where the best value is often found. It can be difficult to feel confident in taking on that much risk, which is why fund managers who are skilled at the art of identifying undervalued assets within a business structure are highly sought after among investors in the alternative lending space.
These managers not only offer value creation in identifying undervalued assets, but they also excel at structuring creative financing solutions to unlock that value, often leveraging their expertise to optimize cash flow, mitigate risks, and align incentives between stakeholders, thereby generating superior risk-adjusted returns for their investors.
“We have a track record in value creation for businesses that are in transition and need restructuring,” says Arif Bhalwani, Managing Director at Toronto’s Third Eye Capital. TEC is an alternative capital provider targeting businesses undergoing change or special situations.
Private credit can often be seen as risky by businesses that have been turned away from traditional banks. But with bank lending criteria tightening steadily over a number of years, the number of great businesses embracing private credit grows larger.
As more businesses seek to refinance through alternative lending companies, the opportunities for alternative capital providers will continue to grow. Increasingly, investors are looking to partner with lenders possessing proven experience in generating mutual value for both their portfolio companies and their investors.
Bhalwani touts his team’s diversity of experience across unique business situations. “We’ve worked across a dozen or more sectors, from alternative energy and technology to healthcare and financial services. Our people bring expertise and experience in these sectors to offer paths for sustained growth.”
Bhalwani’s firm has invested over $5 billion in various business situations. Each one of these investments required a unique set of assessments and tailored plans, giving the team at Third Eye Capital the exact kind of hard-won wisdom that investors seek out.
“We’re looking for those details behind the data, the kind of details that traditional banks often miss. We’re prepared to find unconventional solutions to our portfolio company’s unique situations,” says Bhalwani.
With the alternative lending market in Canada growing 26% this year, reaching around $2.17 billion a year, the opportunities for lucrative partnerships with successful lenders will increase, enticing many investors who are lured by the satisfaction of finding great value in businesses with strong fundamentals.
