Distressed-debt Funds Target Private Credit Downturn as ‘Greatest Opportunity’ since 2008

Marblegate Managing Partner Andrew Milgram told the Financial Times we see the best opportunity for transformational capital in decades. The data is clear. According to the 2025 Shared National Credit Program, nearly $600 billion in troubled loans sit on bank balance sheets, and private credit shows declining quality. Margins have shrunk, profitability has fallen, and interest coverage remains weak across the middle market.

Easy money seeded today’s problem loans. Sponsor-led financial engineering created the illusion of value without improving operations. This environment creates a significant opportunity for investors who execute both financial and operational restructurings. While companies and investors face declining performance and unsustainable debt, those who reset capital structures and operations can create substantial value.