How Third Eye Capital Represents the Next Evolution of Private Credit
Private credit has rarely enjoyed so much attention as it has in 2025. But with all that extra attention comes extra scrutiny. The asset class has grown from a niche corner of the lending universe into a multi-trillion-dollar force shaping how companies restructure, refinance, and survive tightening financial conditions. With banks continuing to pull back and capital demands rising across the middle market, private lenders now sit at the center of a reshaped credit ecosystem.
But the more important transformation is happening beneath the rapid growth: private credit is maturing. The easy era, when money flowed freely and yields were abundant, is giving way to a marketplace that is something less glamorous but far more consequential—discipline.
For many firms, this is exactly the kind of model for which they have advocated across the industry. “When we invest, we bring insight, discipline, and a toolkit for creating value in complex situations,” said Arif Bhalwani, CEO of Toronto-based Third Eye Capital, in a recent interview. “Our team includes sector specialists who work directly with companies to address operational inefficiencies, maximize asset potential, and implement best practices for long-term success.”
For years, the Toronto-based investment firm has been cited as part of a small group of lenders whose playbook was built for the long haul. The industry has plenty of capital, new entrants, and enthusiasm. What it lacks, according to Bhalwani, is a consistent supply of seasoned lenders who understand collateral, complexity, and the messy realities of borrower distress.
Firms like Third Eye Capital avoid chasing scale for the sake of it. They put far more stock in underwriting rigor than marketing gloss. And as private credit enters its next phase, that posture will likely be the difference between success and boom-and-bust.
The private credit story has changed dramatically over the past two years. Rising interest rates exposed the fragility of many balance sheets built during the zero-rate era. Companies that once met their obligations comfortably now lean on payment-in-kind interest, amendments, or full restructurings. Some of the most aggressive lenders have discovered, abruptly, that easy credit terms do not age well.
The industry’s most seasoned lenders have been preparing for a turn like this for years. They designed covenants not as obstacles to growth, but as early-warning systems. Third Eye Capital operates squarely in that camp. The firm’s history suggests a model grounded in asset-based finance and deep borrower engagement. That approach is being recast as the gold standard as private credit adapts to a more demanding cycle.
The Rise of Asset-Based Problem Solvers
The most interesting players in the industry today are those that combine capital with operational insight. They are interpreting assets, identifying value that others miss, and keeping businesses afloat when cash flow alone isn’t enough.
This blend of asset-based lending and special-situations expertise is gaining traction because borrowers are showing up with more complexity than ever. Middle-market companies are juggling higher financing costs, delayed M&A markets, and capital structures that were never designed for 2025’s borrowing environment.
The shops thriving in this moment are the ones that know how to navigate the operational side of credit. Third Eye Capital’s model is often referenced for its emphasis on collateral durability, downside protection, and active stewardship during restructurings, rather than relying on the hope that markets will take care of the exit.
Critics often argue that private credit is opaque. In some corners of the market, that may be true. But a growing number of managers are leaning into transparency, recognizing that institutional investors and regulators want to understand the process.
Third Eye Capital is one of the firms that engages publicly on policy issues, lending standards, and market structure. This willingness to share perspective is becoming a differentiator. In a market increasingly scrutinized for governance gaps, transparency has become a form of currency.
Private credit’s next chapters will be written by lenders who understand complexity, not those who merely survived the boom. Third Eye Capital represents a resilient model of deliberate, disciplined lending attuned to the realities of a market that has moved beyond momentum.