BLOG #4: From Recap to Real Life: Why Capital Restructuring Might Be Your New Best Friend
The office park needs to be built.
Tenants are signed. Cash flow is within reach.
And yet, the entire €32 million project sits stuck—choked by a legacy capital structure that no longer serves the pace of progress.
The original SPV was funded in a near-zero interest world. But that world is gone. One institutional LP has gone cold. Another—overexposed to real estate—is blocking further capital calls. Debt covenants loom. Timelines slip.
And the developer, despite executing flawlessly, faces the worst kind of risk: illiquidity in the face of traction.
Sound familiar?
Welcome to the silent standoff in private markets: commercially successful assets, founders, and operators caught in capital structures that once made sense—but don’t anymore.
Now what?
Private Capital Is Growing Up
This is where capital restructuring—recapitalization—enters the picture.
Not as a distress tool, but as a strategic unlock.
In public markets, restructuring is often framed as failure.
In private markets, it’s fast becoming a mark of maturity.
You’ve likely heard the terms: continuation vehicles, GP-led secondaries, NAV loans, preferred equity.
All jargon—until you live it.
What they really represent is this: a second chance for the right story.
At Dry Capital, we work quietly—often off-market—with exactly these kinds of situations. And what we see again and again is this:
A well-structured recap is the difference between value trapped—and value realized.
Why It’s Happening More Often Now
The macro context has never been more fertile for smart restructuring:
Exit markets are frozen. IPOs are rare. Strategic buyers are cautious.
LPs want liquidity—but nobody wants to sell at a discount.
Founders are tired of 9-month raises that deliver dilution, not direction.
Legacy structures lag reality. That pre-2022 term sheet? It’s a straitjacket now.
Meanwhile, over $130 billion in secondaries dry powder is looking for deals.
And not spray-and-pray unicorns.
They’re looking for quality assets with momentum—just temporarily blocked.
Recap Isn’t Just for the Mega-Funds
The truth?
Recapitalization is often most powerful for those in the €5–50M zone:
Real estate developers mid-project but capital-constrained
Owners with proven deals but no easy path to arbitrage
SPVs managing valuable assets with tired capital stacks
LPs looking for partial liquidity—without hurting NAV
This is where the next growth wave in private markets will emerge:smart, bespoke, unsexy—but unlockable.
How to Know If You’re Stuck
A few telltale signs it might be time to recap:
“The deal is good—but we’re blocked.”
“The equity is misaligned with what the asset needs next.”
“We need a partner, not just more capital.”
“The permits are slowing us down.”
“We’re being forced to sell too early—or hold too long.”
If any of that sounds familiar—you’re not alone.
And you’re not out of options.
What a Good Recap Partner Looks Like
Recaps aren’t checklist transactions.
They require speed, creativity, and trust as well as operational empathy (not just a spreadsheet mindset).
If you’re sitting on a valuable asset—but something in your capital stack is holding it back—let’s talk.
