Committed Capital: Global Private Equity Insights
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Private equity firms are sitting on near record levels of dry powder, along with a large backlog of investments awaiting an exit and increased fundraising activities. Assuming no macroeconomic or geopolitical headwinds, the PE industry’s investment cycle is poised to accelerate.
Hosted by members of Dechert’s Private Equity practice and recognized by Law.com International among the most forward-thinking podcasts in Big Law, Committed Capital explores current issues and trends affecting PE globally, featuring conversations with leaders from across the industry.
Dechert has advised private equity and other alternative asset managers for 40 years on capital solutions at every phase of the investment life cycle. We form funds, negotiate investments, advise on transactions and financings that maximize value, and structure and execute exits accomplished at the right time to deliver the best returns. With lawyers in the United States, Europe, Asia and the Middle East, our interdisciplinary global team has the reach, resources and expertise to advise our clients wherever they do business.
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From Warning Signs to Solutions: Managing Distress in PE-Backed Businesses
October 30, 2026 — When financial challenges emerge, the earliest warning signs aren't always obvious. In this episode of Committed Capital, corporate partner Leahana Grimley sits down with Jennifer Harris and Isabella Vecchio from Dechert's capital solutions team to discuss how private equity sponsors can identify signs of financial distress within their portfolio companies before challenges escalate into a crisis.
Drawing on their experience advising sponsors, borrowers and creditors, they explore both traditional and less obvious indicators of distress, common pitfalls sponsors should avoid and practical strategies for preserving flexibility, maximizing value and positioning portfolio companies for long-term success.
Key Takeaways:
- Financial distress rarely occurs overnight. Traditional warning signs may include covenant defaults, liquidity constraints, upcoming debt maturities, delayed financial reporting and credit downgrades.
- Less obvious indicators can be equally important. Increased lender trading activity, the entry of distressed investors into a lender group, agent turnover, and supply chain or vendor issues may signal growing concerns about a company's condition.
- Understanding your stakeholders and creditor base matters. Understanding the perspectives and motivations of lenders, creditors and other stakeholders can help sponsors navigate complex negotiations and achieve more successful outcomes.
- Early action preserves optionality. Sponsors who proactively engage with lenders, creditors and management teams may have more opportunities to address challenges, pursue strategic alternatives and avoid value-destructive outcomes.
- Avoid reactive decision-making. Sponsors should be cautious about short-term fixes that sacrifice long-term leverage, including forbearance arrangements that provide limited relief in exchange for significant concessions.
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