Insightful Investor #55 - Lawrence Golub: Private Credit Evolution
Jan 28, 2025
Lawrence Golub, Founder and CEO of Golub Capital, shares his expertise on private credit and direct lending. He reflects on his journey from investment banking to building a leading firm, highlighting lessons learned along the way. The conversation dives into the evolution of private credit, addressing inefficiencies and strategies that emerged over the years. Lawrence discusses the resilience of the sector in fluctuating economic conditions and emphasizes the importance of strong partnerships in navigating risks and enhancing financial outcomes.
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Early Career Discontent
- Lawrence Golub's early career at Goldman Sachs led him to believe investment banking was boring.
- His immature perspective blamed the firm, not his unreasonable expectations.
Transition to Principal Investing
- Working with Stan Schumann at Allen & Company provided Golub with experience in both investment banking and principal investing.
- This shift broadened his understanding of ownership perspectives.
Inefficiencies in Early Private Equity Lending
- Historically, private equity lending involved banks for senior debt and mezzanine firms for junior debt, leading to frequent conflicts.
- These conflicts often arose during deal closings due to complex subordination agreements.