Arif Bhalwani, Net Worth of Private Credit, and the Reshaping of Modern Lending
Private credit, once considered a niche corner of capital markets, has grown into a $1.6 trillion force that is increasingly central to how companies raise capital and investors generate returns. The asset class has proven remarkably adaptable, even as interest rates remain elevated and geopolitical uncertainty looms large.
Behind this transformation are financiers like Arif Bhalwani, CEO of Toronto-based Third Eye Capital. Since 2005, Bhalwani's firm has provided more than $5 billion in private financing to companies that don't fit the mold for traditional bank lending. Third Eye Capital's approach, one based on asset-based and opportunity-driven lending, is becoming a core component of corporate finance.
Private debt proved to be one of the most resilient asset classes in 2024. While fundraising across global private markets fell to its lowest level since 2016, private debt held up better than most. Capital deployment rose, and investor interest remained healthy, particularly in direct lending and adjacent strategies like special situations and mezzanine financing.
New-issue private credit financing for leveraged buyouts rose in both Europe and the U.S., fueled by steady deal activity and a more accommodating borrowing environment. Though average spreads in direct lending narrowed by about 120 basis points, they remained attractive relative to other fixed-income assets.
Large institutional investors, including pension funds and insurers, continue to commit to private credit strategies. In a recent Mercer survey, half of large asset owners said they expect to increase their allocations to the space in the coming year.
Private credit's growth has been driven in part by regulatory changes that limited bank lending, especially to mid-sized or complex borrowers. That vacuum created space for lenders like Third Eye Capital, which built a model around understanding business fundamentals beyond the balance sheet.
'We look at complexity as an opportunity,' Bhalwani has said. That philosophy has guided the firm through lending to companies in transition, restructuring, or high-growth phases – all segments that fall outside the scope of conventional credit providers.
As billions in high-yield bonds and leveraged loans approach maturity, demand for flexible refinancing options will certainly increase. Private credit firms with adaptable capital strategies and deep sector knowledge are expected to play a key role in meeting that demand.
One of the key strengths of private credit is its alignment with long-term investor needs. Many private loans, particularly senior-secured or first-lien structures, offer stable cash flows and priority in repayment. In volatile markets, that combination of yield and downside protection has been especially appealing.
Although the structure of deals has evolved, the majority of managers remain focused on disciplined underwriting and portfolio diversification. Many firms, including those with multi-year track records like Third Eye Capital, have weathered different market cycles and are confident about scaling operations without sacrificing selectivity.
While concerns about transparency and liquidity persist, the day-to-day behavior of institutional investors signals confidence in the asset class. According to Cambridge Associates, U.S. and European limited partners have remained consistent in their allocations, viewing private credit as a valuable counterbalance to equity market volatility.
Direct lending, special situations, distressed credit, and venture debt are all expanding as companies seek alternatives to traditional financing. Private credit's role is also evolving beyond corporate loans into real estate, infrastructure, and even fund-level financing.
Bhalwani's experience and success with Third Eye Capital reflect the broader trend of investors and borrowers turning to specialized lenders who can act decisively in complex situations. Rising refinancing needs, a more flexible approach to risk, and enduring investor appetite are all part of how private credit has matured. If firms focus on fundamentals, specialization, and long-term value creation, they will sustain an asset class that continues to draw capital even as the broader private markets recalibrate.
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