US Middle Market Earnings Up 13%: Lawrence Golub

The transcript discusses a $60 billion private credit firm and its recent US middle market report, highlighting strong earnings growth. The CEO, Lawrence Golub, talks about capital allocation in a high-interest environment, noting a slowdown in equity valuations and a stable US economy. Despite rising base rates, default rates remain low. Projections for private equity returns in 2024 suggest below-average performance for recent vintages. The impact of geopolitical events on market sentiment is also considered, with a noted slowdown in LBO activity in the USA, contrasting with robust activity in the Middle East.

What trends are observed in the allocation of capital in the current interest rate environment?

What factors have contributed to the appealing risk return for investors in private credit?

How have default rates in the portfolio been affected despite the increase in base rates?

What are the expectations for private equity returns from the vintages of 2019-2021?

What are the implications of private equity firms holding companies longer?

What impact has the recent situation in Gaza had on investor sentiment towards private equity?

How does the LBO activity in the Middle East compare to that in the USA?