Turnaround advisors and special situations lenders must market hardest when business is quiet, building credibility, relationships, and early-warning expertise now to capture mandates when the next distressed cycle hits.
The turnaround advisory business operates on a fundamental paradox: the professionals who will be most needed during the next distressed cycle must build their reputations and relationships during periods when distress is scarce.
With KBRA identifying 5% of middle market borrowers as at-risk, Lincoln International tracking a 6% “shadow default rate,” and 30% of near-term maturities facing refinancing challenges, the cycle is turning.¹ ² The turnaround advisors and special situations lenders who will capture the coming workflow are those positioning today—building awareness, establishing credibility, and developing relationships that will translate to mandates when stress converts to restructuring activity.
For an ecosystem audience accustomed to thinking about origination, underwriting, and value creation, the counter-cyclical business development strategies of the restructuring community offer instructive lessons about building franchises that thrive across market conditions.
The Counter-Cyclical Marketing Challenge
Traditional professional services marketing assumes relatively stable demand: law firms, accounting practices, and consulting firms can forecast workflow based on economic activity, regulatory changes, and client growth. Marketing investments generate returns within predictable timeframes.
Turnaround advisory operates differently. Demand is episodic, concentrated in periods of economic stress that arrive unpredictably and intensely. The 2008-2009 financial crisis generated restructuring workflow that took years to process. The COVID-19 disruption created a brief spike followed by government intervention that suppressed expected distress. The current environment—elevated rates, tariff uncertainty, aging private equity portfolios—presents stress signals without yet producing the volume of formal restructurings that peak-cycle conditions generate.
This episodic demand pattern creates a marketing challenge: How do you stay visible and credible during periods when your core services aren’t needed, so you’re positioned to capture mandates when conditions change?
The answer lies in what the restructuring community calls “educational positioning”—establishing expertise and relationships by helping ecosystem participants identify early warning signals, understand restructuring mechanics, and prepare for scenarios they hope to avoid.
Educational Content as Positioning Strategy
The most successful turnaround practices invest heavily in content that serves audiences beyond immediate distress situations. This content serves multiple purposes: it demonstrates expertise, builds relationships with referral sources, and creates touchpoints that keep the practice visible during quiet periods.
FTI Consulting, one of the leading restructuring advisory firms globally, describes its approach as helping clients “develop innovative strategies and solutions” before situations become urgent.³ This positioning—as strategic advisors who can help avoid restructuring, not just navigate it—expands the addressable market beyond companies already in crisis.
EY-Parthenon’s restructuring practice emphasizes “trusted leadership in critical and complex situations to transform, create, preserve and recover value.”⁴ The language is notable: “transform” and “create” come before “preserve” and “recover,” positioning the practice for engagement before distress rather than only after.
AlixPartners has invested in thought leadership around liability management exercises, noting that “LMEs require a path to operationalize and an understanding of the long-term implications to the operations and cash flows of the business.”⁵ By publishing analysis of LME mechanics and implications, the firm establishes expertise that positions it for mandates when sponsors and lenders consider these transactions.
The content strategy extends beyond white papers and articles. The Turnaround Management Association hosts conferences, regional events, and educational programming that keep members visible during all market conditions. The 2025 TMA Annual Conference in New Orleans and the upcoming 2026 TMA Distressed Investing Conference in Houston provide platforms for practitioners to maintain relationships and demonstrate expertise.⁶
Building Sponsor Relationships Before They’re Needed
Private equity sponsors represent the most important referral source for turnaround advisors. Sponsors control portfolio companies that may require restructuring support; they select the advisors who will guide those processes; and they influence lender selection of advisors in workout situations.
The challenge: sponsors during healthy markets don’t want to discuss restructuring. Conversations about portfolio company distress feel premature, uncomfortable, or even threatening to deal team members whose compensation depends on successful exits.
Sophisticated turnaround advisors navigate this dynamic by reframing their value proposition. Rather than positioning as “restructuring advisors,” they offer “performance improvement,” “operational transformation,” or “strategic options assessment”—language that feels proactive rather than reactive.
BDO’s Turnaround and Restructuring Services practice describes its capabilities as helping companies “achieve their goals” through “turnaround strategy development and execution, including financial modeling and projections and strategic alternative reviews.”⁷ This framing positions the practice for engagement before formal distress—when sponsors recognize underperformance but haven’t yet acknowledged restructuring need.
The relationship-building often happens through adjacent services. Turnaround professionals who also provide transaction advisory, due diligence support, or operational consulting build sponsor relationships during healthy deal activity. When portfolio company stress emerges, existing relationships translate to restructuring mandates.
Oliver Wyman’s restructuring practice emphasizes serving “as an impartial and trusted advisor to companies and investors facing strategic, operational, and financial restructuring challenges.”⁸ The inclusion of “strategic” and “operational” alongside “financial” restructuring expands engagement opportunities beyond formal insolvency situations.
Lender Relationship Development
Private credit lenders represent another critical constituency. When portfolio companies experience stress, lenders must decide whether to extend and amend, pursue workout processes, or force restructuring. Turnaround advisors often serve lender interests in these situations—providing independent assessment of borrower viability, monitoring restructuring execution, or serving as Chief Restructuring Officers when management credibility is compromised.
Building lender relationships during healthy markets requires demonstrating value before workout mandates arise. This often takes the form of:
Portfolio monitoring support: Turnaround advisors can help lenders develop early warning systems, stress-test portfolio exposures, and create triage frameworks for identifying which borrowers warrant enhanced attention.
Underwriting diligence: Some turnaround practices offer diligence support for new originations—assessing downside scenarios, evaluating management team capabilities under stress, and identifying structural features that might complicate future workouts.
Educational programming: Presenting at lender conferences, hosting roundtables on restructuring topics, and providing training for credit professionals builds awareness and relationships that translate to mandates when conditions change.
The Secured Finance Network (SFNet) and TMA Europe collaborated on the 2025 European Distressed Investing & Asset Based Lending Summit—bringing together ABL lenders and restructuring professionals in a forum that builds relationships across the ecosystem.⁹ These cross-pollination events serve business development purposes for turnaround advisors while providing educational value for lender participants.
Early Warning Indicators: Demonstrating Value Before Crisis
One of the most effective positioning strategies involves helping ecosystem participants identify stress signals before they become obvious. By providing frameworks for early warning detection, turnaround advisors demonstrate expertise while creating opportunities for early engagement.
Current market conditions provide abundant material for early warning analysis. The indicators that sophisticated turnaround advisors are tracking include:
PIK conversion patterns: Lincoln International’s “bad PIK” metric—companies that added PIK interest after their original deal closed—has become a widely-cited stress indicator. By Q3 2025, 57.2% of PIK arrangements were classified as “bad PIK,” up from 36.7% in Q4 2021.¹⁰ Turnaround advisors who educate sponsors and lenders about PIK as a stress signal position themselves for engagement when those situations progress.
Interest coverage deterioration: While the median middle market borrower has stabilized at 1.5x interest coverage, the distribution matters more than the median.¹¹ Companies with coverage below 1.0x face mathematical challenges that operational improvement alone cannot solve. Turnaround advisors who help lenders identify which borrowers face unsustainable coverage positions create value before formal distress.
Maturity wall exposure: KBRA’s data showing 30% of near-term maturities have leverage above 10x or negative EBITDA provides actionable intelligence.¹² Turnaround advisors who help sponsors and lenders assess maturity exposure across portfolios position themselves for engagement as refinancing deadlines approach.
Sector concentration risk: The over-representation of stress in specific sectors—chemicals, retail, media, construction materials—enables targeted positioning. Turnaround advisors with sector expertise in challenged industries can offer specialized insight that generalists cannot match.
DIP Lender Positioning Strategies
Special situations lenders face similar counter-cyclical marketing challenges. Debtor-in-possession (DIP) financing, rescue capital, and distressed debt investment opportunities concentrate during stress periods. Building the relationships and reputation necessary to capture these opportunities requires sustained effort during quieter markets.
Successful special situations lenders employ several positioning strategies:
Sponsor relationship cultivation: DIP lenders who maintain relationships with private equity sponsors position themselves for rescue financing opportunities when portfolio companies face liquidity crises. Sponsors often prefer working with known counterparties who understand their portfolio company situations and can move quickly when capital is needed.
Advisor network development: Restructuring advisors frequently recommend DIP lenders to clients. Building relationships with turnaround professionals—through conference participation, deal collaboration, and ongoing dialogue—creates referral channels that generate deal flow.
Demonstrated execution capability: Special situations lending requires speed, creativity, and tolerance for complexity. Lenders who can demonstrate track records of executing difficult transactions—and who publicize those successes through case studies and deal announcements—build reputations that attract future opportunities.
Educational content: Like turnaround advisors, special situations lenders benefit from thought leadership that demonstrates expertise. Analysis of DIP financing trends, rescue lending structures, and distressed debt market dynamics establishes credibility with potential borrowers, sponsors, and advisors.
The Current Window: Why Now Matters
The present moment represents a particularly valuable positioning window for turnaround advisors and special situations lenders. Stress signals are emerging, but crisis has not yet arrived. This creates time for relationship building and positioning that will translate to mandates as conditions evolve.
Several factors make current positioning particularly valuable:
Visibility of stress: Unlike prior cycles where stress emerged suddenly, current conditions provide observable leading indicators. The 5% at-risk cohort identified by KBRA, the rising shadow default rate tracked by Lincoln, and the maturity wall exposure are knowable today.¹³ Turnaround advisors who engage sponsors and lenders around these specific risks demonstrate relevance and timeliness.
Extended timeline: Rate persistence has extended the timeline from stress emergence to formal restructuring. Companies that would have defaulted under previous assumptions about rate cuts have instead received amendments, PIK conversions, and maturity extensions. This extended runway creates opportunity for early engagement that might generate performance improvement mandates rather than (or before) restructuring mandates.
Sponsor receptivity: Private equity sponsors managing aging portfolios with impaired valuations are increasingly receptive to conversations about strategic alternatives. The deployment pressure facing new capital creates focus on existing portfolio situations. Turnaround advisors who can help sponsors triage portfolios—identifying which companies to support, which to sell, and which to restructure—find engaged audiences.
LP pressure: Limited partners demanding distributions are pushing sponsors to resolve stuck situations. This pressure creates receptivity to restructuring conversations that might have been deferred during more patient capital environments.
Differentiating in a Crowded Market
The restructuring advisory market includes large platform firms (AlixPartners, FTI, Alvarez & Marsal, Huron), Big Four practices (EY-Parthenon, PwC, Deloitte, KPMG), boutique specialists, and independent practitioners. Differentiation in this competitive landscape requires clarity about positioning and target clients.
Successful differentiation strategies include:
Sector specialization: Turnaround advisors with deep expertise in specific sectors—healthcare, retail, manufacturing, energy—can offer insights that generalists cannot match. Sector specialists understand industry-specific dynamics, regulatory considerations, and operational improvement opportunities.
Size segment focus: The needs of a $500 million revenue company differ substantially from those of a $50 million company. Turnaround practices that focus on specific size segments develop playbooks, relationships, and expertise tailored to their target market.
Geographic concentration: Middle market restructuring often involves companies with operations concentrated in specific regions. Turnaround advisors with local presence, court relationships, and regional reputation can compete effectively against national platforms in their markets.
Functional expertise: Some turnaround practices differentiate through specific functional capabilities—cash management, supply chain restructuring, labor negotiations, real estate rationalization. This functional specialization enables positioning as specialists who complement broader advisory teams.
Interim management capability: Practices that can provide Chief Restructuring Officers, interim CFOs, or other operational leadership differentiate from pure advisory competitors. The ability to embed professionals in client organizations creates deeper relationships and more comprehensive mandates.
Content Marketing Tactics That Work
For turnaround advisors and special situations lenders developing marketing strategies, certain content approaches prove particularly effective:
Timely analysis of market developments: When significant restructurings occur, bankruptcies are filed, or market stress indicators move, rapid analysis demonstrates engagement and expertise. The firms that publish thoughtful commentary within days of major developments capture attention and establish thought leadership.
Early warning frameworks: Content that helps readers identify stress signals before they become obvious provides immediate value. Frameworks for assessing portfolio company health, evaluating restructuring risk, or prioritizing workout attention serve practical needs while positioning the author as expert.
Process education: Many sponsors, lenders, and company executives have limited experience with restructuring processes. Educational content explaining Chapter 11 mechanics, out-of-court restructuring options, or DIP financing structures serves audiences while demonstrating expertise.
Case study analysis: Detailed examination of completed restructurings—what worked, what didn’t, and what lessons apply to future situations—provides valuable insight while showcasing relevant experience.
Market data and trends: Proprietary data about restructuring activity, advisory fee trends, or outcome analysis differentiates content from generic commentary. Firms that develop proprietary datasets create content assets that competitors cannot replicate.
Relationship Maintenance During Quiet Periods
Beyond content marketing, successful turnaround practices maintain relationships through consistent engagement that doesn’t depend on active mandates:
Regular check-ins: Periodic outreach to sponsors, lenders, and referral sources maintains visibility without requiring specific business purpose. Sharing relevant articles, congratulating contacts on professional developments, or simply staying in touch keeps relationships warm.
Event participation: Industry conferences, local business events, and professional association activities provide natural opportunities for relationship maintenance. Consistent presence at relevant events builds familiarity and trust.
Referral reciprocity: Turnaround advisors who refer business to other professionals—lawyers, investment bankers, other advisors—build reciprocal relationships that generate return referrals when appropriate situations arise.
Alumni networks: Professionals who have worked at turnaround advisory firms often move to sponsor organizations, lender platforms, or corporate roles. Maintaining relationships with alumni creates referral networks that span the ecosystem.
Ecosystem Implications
For Turnaround Advisors: The positioning window is open. Stress signals are visible, but crisis has not yet concentrated demand among the established players. Invest in educational content, sponsor and lender relationship development, and early warning frameworks that demonstrate expertise. Consider how sector specialization, size segment focus, or functional expertise can differentiate your practice as competition intensifies.
For Special Situations Lenders: Build sponsor relationships before rescue capital is needed. Cultivate advisor networks that will recommend your capital when restructuring situations require DIP financing. Develop reputation for speed, creativity, and execution that will attract opportunities when market conditions generate deal flow.
For PE Sponsors: Develop relationships with turnaround advisors before portfolio company stress forces reactive engagement. Early intervention—engaging turnaround support when performance deteriorates but before covenant defaults—generates better outcomes than crisis-driven restructuring. Consider which turnaround practices have relevant sector expertise, size segment experience, and cultural fit with your organization.
For Lenders: Build relationships with turnaround advisors who can provide independent assessment of troubled borrowers. Develop frameworks for early engagement—bringing turnaround support to the table before formal default—that preserve value for all stakeholders. Consider whether internal workout capabilities are adequate for expected volume, or whether advisor relationships should be cultivated for capacity augmentation.
For Investment Bankers: Restructuring activity generates M&A mandates—both for distressed sales and for acquisitions by better-capitalized buyers seeking discounted assets. Build relationships with turnaround advisors who may source sell-side opportunities. Develop expertise in distressed M&A processes that differ from healthy-company transactions.
For Legal Advisors: Restructuring workflow is coming. Build relationships with turnaround advisors who may recommend counsel for restructuring situations. Develop sector expertise in areas where stress concentrates—retail, healthcare, manufacturing—to position for specialized mandates. Consider how your firm’s restructuring capabilities compare to competitors and whether investment in practice development is warranted.
Sources:
- 1KBRA, “Private Credit: Q4 2024 Middle Market Borrower Surveillance Compendium—5% at Risk,” February 4, 2025 https://www.businesswire.com/news/home/20250204515806/en/KBRA-Releases-Research-Private-Credit-Q4-2024-Middle-Market-Borrower-Surveillance-Compendium5-at-Risk
- 2PitchBook, “In stress measure, private credit lenders take over $17B of debt—Lincoln,” May 23, 2025 https://pitchbook.com/news/articles/in-stress-measure-private-credit-lenders-take-over-17b-of-debt-lincoln
- 3FTI Consulting, “Company Advisory | Turnaround & Restructuring” https://www.fticonsulting.com/services/turnaround-and-restructuring/company-advisory
- 4EY, “Restructuring and Turnaround Strategy Consulting” https://www.ey.com/en_us/services/strategy/restructuring-turnaround-strategy
- 5AlixPartners, “Turnaround & Restructuring consulting” https://www.alixpartners.com/what-we-do/turnaround-restructuring/
- 6Turnaround Management Association, “TMA Annual Conference” https://www.turnaround.org/events/conferences/tma-annual/
- 7BDO, “Turnaround and Restructuring Services” https://www.bdo.com/services/advisory/turnaround-restructuring-services
- 8Oliver Wyman, “Tailored Business Turnaround And Restructuring Strategies” https://www.oliverwyman.com/our-expertise/capabilities/turnaround-and-restructuring.html
- 9TMA Europe, “2025 European Distressed Investing & Asset Based Lending Summit” https://www.tma-europe.org/events/2025-european-distressed-investing-asset-based-lending-summit/
- 10Fortune, “Private credit deals see a rise in ‘bad PIKs’ showing ‘cracks’,” November 21, 2025 https://fortune.com/2025/11/21/private-credit-bad-piks-cracks-in-the-market/
- 11KBRA, “Private Credit: Q3 2025 Middle Market Borrower Surveillance Compendium: Defaults Will Rise,” November 25, 2025 https://www.morningstar.com/news/business-wire/20251125230170/kbra-releases-research-private-credit-q3-2025-middle-market-borrower-surveillance-compendium-defaults-will-rise
- 12Ibid.
- 13KBRA, Q4 2024 Compendium, op. cit.