Arif Bhalwani has been at the forefront of the private credit industry in Canada since founding Third Eye Capital in 2005. In a country where lending is dominated by the “Big 6” banks and interest rates remain at highs not seen for decades, Bhalwani’s firm offers bespoke financing packages for small and medium-sized enterprises (SMEs), providing a much-needed alternative for Canada’s economy.
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Q: The private credit industry in Canada has seen rapid growth in the last few years even as interest rates have risen. How do you see the industry evolving in the coming years?
ARIF BHALWANI: Those tightening bank regulations have made it difficult for many good companies that are in transition or facing special situations and need capital financing. Third Eye Capital and other private credit firms have been able to fill a gap in the lending market by providing tailored financial solutions that allow companies to innovate and stay competitive. We’ve honed a set of investment principles that let us see value where others don’t – specifically in assets that are often hidden on the balance sheet or misunderstood by traditional lenders.
While banks focus on cash flow and covenants, we uncover and lend against assets such as unencumbered equipment, subsidiary equity interests, mineral rights, intellectual property, or even uncompleted projects – things that may not be readily apparent on financial statements but have real, monetizable value. We also identify underappreciated working capital and long-dated contracts that others dismiss as too complex or too risky. Because we’re not afraid of complexity, change, or challenge, we can unlock value in situations where others walk away.
We are focused on building relationships that guide companies to success. We’ve also attracted a set of investors who recognize the value in more complex situations that don’t attract competition from other lenders. Third Eye Capital’s future, and the future of our industry, will hinge on the quality of those relationships with partner companies and our ability to continue to return value to our investors through successful turnarounds.
Q: Can you speak more about your process for assessing opportunities and assets within companies that are in transition?
ARIF BHALWANI: Every business has intangible assets, whether it’s intellectual property, the strength of its brand, or proprietary know-how. Assessing those underappreciated assets is what sets us apart. We go deep with management to understand their operational capabilities, long-term vision, and the structural strengths of the business. We’re not just looking for a financial fix – we’re looking for a viable path forward. When we see a proven business model, committed stakeholders, and untapped value, we help the company realize its full potential, often in ways that others can’t or won’t.
Q: Can you share an example of how your firm has helped a company navigate a complex financial situation?
ARIF BHALWANI: A great example is a women’s apparel retailer we backed that had overextended itself by expanding its SKUs and store footprint too quickly. The result was bloated inventory, operational inefficiencies, and a strained balance sheet. Traditional lenders saw a struggling fashion brand; we saw a loyal customer base, strong gross margins on core products, and untapped potential in e-commerce.
We provided a senior secured facility against inventory, but more importantly, we helped the company execute a “shrink to grow” strategy – rationalizing its product lines, consolidating its store network, and investing in a more robust omnichannel platform. Within 18 months, the business had stabilized, margins improved significantly, and it was able to get back into the banking market to refinance itself with cheaper capital. What made the difference was our willingness to underwrite complexity and help management reposition the business, not just finance it.
Q: How does Third Eye Capital engage with companies beyond just lending?
ARIF BHALWANI: We become partners in solving problems. Our most important assessment is the integrity and adaptability of the management team. That’s crucial if we want to have any success. Our sector specialists work with companies that have been underserved or overlooked and provide insights, operational support, and valuable networking opportunities to address issues and enhance strengths. We bring a collaborative mindset to tackle tough business challenges.
Q: With over $5 billion invested across multiple sectors, what lessons have you and your team learned about managing risk and generating sustainable value?
Arif Bhalwani: The key to success in private credit is understanding how to calibrate the balance between risk and opportunity. We’ve invested in so many industries like energy, mining, media, construction services, healthcare, technology, and retail, which has given us a broad set of pattern recognition, sector insights, and restructuring experience that we apply across every opportunity. It allows us to identify risks that others might miss and to recognize value where others see only volatility.
This cross-sector knowledge also helps us structure more thoughtful capital solutions, tailored not just to the financial needs of a business, but to its operational reality and long-term potential. Ultimately, it’s our ability to navigate complexity with clarity and conviction that drives sustainable outcomes for both our portfolio companies and our investors.
