Golub Capital

1994–2000: Foundation and early success

Golub Capital was founded in New York City in 1994 by Lawrence Golub. Golub had previously worked at Allen & Company, Wasserstein Perella & Co., and Bankers Trust. He had also been a White House Fellow.^[3] The firm initially operated with $20 million of equity capital under management.^[3][4] Anchor investors in Golub Capital's first fund included Dan Lufkin (of Donaldson, Lufkin & Jenrette), Stanley S. Shuman (of Allen & Company), and Mellon Bank among others.^[5] Golub and an assistant were the only employees at Golub Capital's outset, but, by 2000, the firm had between 8 and 10 employees and a fund worth a couple hundred million dollars.^[4][6]

2000–2004: Shift in focus

In 2000, the firm began specializing in mezzanine loans. These loans were geared toward private equity-backed companies. Golub Capital no longer made investments in controlled private equity investments in order not to compete with their private equity clients. In the aftermath of the dot-com bust in 2000, the firm achieved success with its mezzanine loans as most cash flow loans became unavailable.^[3][4]

In 2003, Lawrence's brother David Golub^[3] joined the firm as its President (with Lawrence Golub remaining CEO). Golub had previously been Managing Director of both Centre Partners Management LLC and Corporate Partners.^[7] Andrew Steuerman joined Golub Capital in 2004. Steuerman became the head of originations^[3] and eventually gained the titles of Senior Managing Director and Head of Middle Market and Late Stage Lending.^[8]

2004–2008: Further business expansion

In 2004, Golub Capital began offering senior and one-stop loans. By 2007, the firm was a lead lender and arranger in senior loans.^[4] In 2005, on the final closing of its fourth GCP fund (Golub Capital Partners IV), the firm raised $800 million of equity capital. Its fifth GCP fund (Golub Capital Partners V) raised $700 million of equity capital. Golub Capital's total capital under management increased to $2.5 billion as a result.^[9][10]

2008–present: Financial crisis and beyond

During the 2008 financial crisis, Golub Capital was one of the few lending firms that continued to grow.^[3][4] By the end of 2008, the firm was third by deal volume for lead arrangers of sub-$100 million leveraged buyout loans and had raised $1.5 billion for new loans.^[3][11] In 2009, it became the number one bookrunner for leveraged buyout loans in the middle market. By 2010, the firm had $4 billion capital under management.^[12]

Golub Capital BDC, Inc. was founded in 2009 and went public in March 2010. It trades on the NASDAQ under stock ticker symbol, GBDC.^[6][13] David Golub serves as the CEO and President of Golub Capital BDC.^[7]

In 2011, the firm had 120 employees with offices in New York, Chicago, and Atlanta.^[3] Their loan portfolio also increased to $5 billion.^[14] In 2012, the firm led a targeted campaign to serve lower middle market companies that have an annual EBITDA of between $6 and $8 million.^[15]

In 2014, the firm's capital under management increased to $10 billion with the final closings of the Golub Capital Partners VIII fund and the Golub Capital Partners International VIII.^[5] That year, the firm closed a mix of deals, including boot retailer Boot Barn with a $100 million facility^[16] and fiber optic infrastructure company Wilcon Holdings with a $59 million facility.^[17] The firm opened a lending office in San Francisco in 2014 to handle its late stage lending business line.^[18] As of 2018, the firm has over $25 billion in capital under management.^[19] In March 2018, Golub Capital supported the acquisition of Togetherwork Holdings by GI partners.^[20]

In August 2018, Golub Capital sold a passive, non-voting minority stake in its management companies to Dyal Capital Partners, a subsidiary of asset manager Neuberger Berman Holdings.^[21] In 2021, Bloomberg listed Golub Capital as one of a handful of private equity firms that could leverage large buyouts without the assistance of Wall Street banks.^[22]

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New York City

New York City

New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over 300.46 square miles (778.2 km2), New York City is the most densely populated major city in the United States and more than twice as populous as Los Angeles, the nation's second-largest city. New York City is located at the southern tip of New York State. It constitutes the geographical and demographic center of both the Northeast megalopolis and the New York metropolitan area, the largest metropolitan area in the U.S. by both population and urban area. With over 20.1 million people in its metropolitan statistical area and 23.5 million in its combined statistical area as of 2020, New York is one of the world's most populous megacities, and over 58 million people live within 250 mi (400 km) of the city. New York City is a global cultural, financial, entertainment, and media center with a significant influence on commerce, health care and life sciences, research, technology, education, politics, tourism, dining, art, fashion, and sports. Home to the headquarters of the United Nations, New York is an important center for international diplomacy, and is sometimes described as the capital of the world.

Bankers Trust

Bankers Trust

Bankers Trust was a historic American banking organization. The bank merged with Alex. Brown & Sons in 1997 before being acquired by Deutsche Bank in 1999. Deutsche Bank sold the Trust and Custody division of Bankers Trust to State Street Corporation in 2003.

Donaldson, Lufkin & Jenrette

Donaldson, Lufkin & Jenrette

Donaldson, Lufkin & Jenrette (DLJ) was a U.S. investment bank founded by William H. Donaldson, Richard Jenrette, and Dan Lufkin in 1959. Its businesses included securities underwriting; sales and trading; investment and merchant banking; financial advisory services; investment research; venture capital; correspondent brokerage services; online, interactive brokerage services; and asset management.

Allen & Company

Allen & Company

Allen & Company LLC is an American privately held boutique investment bank based at 711 Fifth Avenue, New York. The firm specializes in real estate, technology, media and entertainment.

Investment fund

Investment fund

An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These advantages include an ability to:hire professional investment managers, who may offer better returns and more adequate risk management; benefit from economies of scale, i.e., lower transaction costs; increase the asset diversification to reduce some unsystematic risk.

Mezzanine capital

Mezzanine capital

In finance, mezzanine capital is any subordinated debt or preferred equity instrument that represents a claim on a company's assets which is senior only to that of the common shares. Mezzanine financings can be structured either as debt or preferred stock.

Private equity

Private equity

In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a type of ownership of assets and is a class of assets, which function as modes of financial management for operating private companies that are not publicly traded in a stock exchange.

Dot-com bubble

Dot-com bubble

The dot-com bubble was a stock market bubble in the late 1990s. The period coincided with massive growth in Internet adoption, a proliferation of available venture capital, and the rapid growth of valuations in new dot-com startups.

Cash flow loan

Cash flow loan

A cash flow loan is a type of debt financing, in which a bank lends funds, generally for working capital, using the expected cash flows that a borrowing company generates as collateral for the loan. Cashflow loans are usually senior term loans or subordinated debt, being used for funding growth or financing an acquisition.

Nasdaq

Nasdaq

The Nasdaq Stock Market is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second on the list of stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange. The exchange platform is owned by Nasdaq, Inc., which also owns the Nasdaq Nordic stock market network and several U.S.-based stock and options exchanges. According to a Gallup poll conducted in 2022, approximately 58% of American adults reported having money invested in the stock market, either through individual stocks, mutual funds, or retirement accounts.

Chicago

Chicago

Chicago is the most populous city in the U.S. state of Illinois and the third most populous in the United States after New York City and Los Angeles. With a population of 2,746,388 in the 2020 census, it is also the most populous city in the Midwest. As the seat of Cook County, the city is the center of the Chicago metropolitan area, one of the largest in the world.

Atlanta

Atlanta

Atlanta is the capital and most populous city of the U.S. state of Georgia. It is the seat of Fulton County, the most populous county in Georgia, although a portion of the city extends into neighboring DeKalb County. With a population of 498,715 living within the city limits, it is the eighth most populous city in the Southeast and 38th most populous city in the United States according to the 2020 U.S. census. It is the core of the much larger Atlanta metropolitan area, which is home to more than 6.1 million people, making it the eighth-largest metropolitan area in the United States. Situated among the foothills of the Appalachian Mountains at an elevation of just over 1,000 feet (300 m) above sea level, it features unique topography that includes rolling hills, lush greenery, and the most dense urban tree coverage of any major city in the United States.

Golub Capital has three main business lines: middle market lending, late stage lending, and broadly syndicated loans.^[23] The firm typically invests in sectors like SaaS, health care, restaurants, business services, and many others.^[8][14] The firm is also affiliated with Golub Capital BDC, Inc., a publicly traded (NASDAQ: GDBC) business development company.^[6]

Middle Market Lending

Andrew Steuerman heads Golub Capital’s Middle Market Lending team located in Chicago and New York. The business line focuses on providing senior, one-stop, and second lien debt to U.S. middle market companies, typically controlled by private equity firms.^[3][5] Golub Capital can hold over $400 million in each middle market lending deal,^[24] and the team can also underwrite and syndicate senior credit facilities and a proprietary suite of one-loan debt facilities of up to $1 billion.^[25] The typical borrower generates between $5 million to $50 million a year in EBITDA and is backed by one of over 200 private equity companies with which Golub Capital has a working relationship.^[15] Approximately 85% of financings done with private equity companies come from pre-existing relationships.^[5]

Late Stage Lending

The firm's late stage lending unit is also headed by Andrew Steuerman.^[8] The team operates out of the firm's San Francisco office in order to be closer to Silicon Valley.^[23] The business offers debt to fast-growing technology companies backed by venture capital, growth equity, private equity, or other private companies.^[18][23]

Broadly Syndicated Loans

Golub Capital's Broadly Syndicated Loans group is headed by Scott Morrison in the firm's Chicago office.^[5][12] This unit focuses on investing in larger loans that are generally liquid in the secondary market. The Broadly Syndicated Loans team also manages a series of collateralized loan obligations.^[26]

Golub Capital BDC, Inc.

Golub Capital BDC, Inc., (a business development company) was founded in 2009 and went public in March 2010 Nasdaq: GBDC.^[6] David Golub serves as the President and CEO of the company.^[7] The company lends money to middle market companies that have backing from private equity firms.^[27]

Golub Capital BDC, Inc. reported that it acquires common stock securities of Business for the intent of providing bonus bonuses to Golub Capital LLC workers purchased more than 5,6 million common stock securities of the Company between April 1 , 2020 and June 15, 2020.^[28]

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Health care

Health care

Health care or healthcare is the improvement of health via the prevention, diagnosis, treatment, amelioration or cure of disease, illness, injury, and other physical and mental impairments in people. Health care is delivered by health professionals and allied health fields. Medicine, dentistry, pharmacy, midwifery, nursing, optometry, audiology, psychology, occupational therapy, physical therapy, athletic training, and other health professions all constitute health care. It includes work done in providing primary care, secondary care, and tertiary care, as well as in public health.

Silicon Valley

Silicon Valley

Silicon Valley is a region in Northern California that serves as a global center for high technology and innovation. Located in the southern part of the San Francisco Bay Area, it corresponds roughly to the geographical area of Santa Clara Valley. San Jose is Silicon Valley's largest city, the third-largest in California, and the tenth-largest in the United States; other major Silicon Valley cities include Sunnyvale, Santa Clara, Redwood City, Mountain View, Palo Alto, Menlo Park, and Cupertino. The San Jose Metropolitan Area has the third-highest GDP per capita in the world, according to the Brookings Institution, and, as of June 2021, has the highest percentage of homes valued at $1 million or more in the United States.

Secondary market

Secondary market

The secondary market, also called the aftermarket and follow on public offering, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. The initial sale of the security by the issuer to a purchaser, who pays proceeds to the issuer, is the primary market. All sales after the initial sale of the security are sales in the secondary market. Whereas the term primary market refers to the market for new issues of securities, and "[a] market is primary if the proceeds of sales go to the issuer of the securities sold," the secondary market in contrast is the market created by the later trading of such securities.

Collateralized loan obligation

Collateralized loan obligation

Collateralized loan obligations (CLOs) are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches. A CLO is a type of collateralized debt obligation.

Nasdaq

Nasdaq

The Nasdaq Stock Market is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second on the list of stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange. The exchange platform is owned by Nasdaq, Inc., which also owns the Nasdaq Nordic stock market network and several U.S.-based stock and options exchanges. According to a Gallup poll conducted in 2022, approximately 58% of American adults reported having money invested in the stock market, either through individual stocks, mutual funds, or retirement accounts.