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Private Markets · Value-add 'scratch and dent' PE will survive; financial-only dealmakers face obsolescence

now playing · Private Markets

Macro & Ratestailwindscore 9/10andrew milgram

Middle market EBITDA down 25% since 2019, net profits down 200%, creating distressed opportunity

Data from 1,200 middle market companies shows persistent earnings deterioration, narrowing margins, and 25%+ unable to cover debt service, driving bankruptcy wave while public companies thr…

Private Creditheadwindscore 9/10andrew milgram

82% of private credit in B-/CCC tier with manipulated default rates and 18% PIK in BDCs signals looming losses

Fitch data shows private credit concentrated in lowest quality tier; managers avoid marking defaults via waivers/amendments, while BDCs take equity risk via PIK debt in deteriorating middle…

Geopolitics & Trademixedscore 8/10andrew milgram

Tariffs above 5-6% devastate middle market margins but benefit public companies with pricing power

Large public companies push costs onto middle market suppliers while maintaining consumer pricing power, widening the K-shaped divide; middle market faces margin crush and debt service fail…

Asset-Based Financetailwindscore 8/10andrew milgram

Marble Gate acquires 30% of NYC taxi medallions for $600M and takes operation public

Bought distressed medallion loans at deep discount, restructured operations with data-driven driver management, consolidated fragmented market, and took public to realize durable cash flows.

Asset-Based Financetailwindscore 8/10andrew milgram

Buying ERTC claims at 85 cents on dollar from capital-starved middle market

Purchasing government-backed tax credit refunds at discount from liquidity-constrained middle market companies, earning 6-7% statutory interest while waiting for IRS payment, with put-back…

Private Marketsmixedscore 7/10andrew milgram

Value-add 'scratch and dent' PE will survive; financial-only dealmakers face obsolescence

Firms applying operational force to unloved assets create value; those merely buying and attending board meetings add no value and lack future in competitive market.