As they have for the past eight quarters, private equity firms continue to demonstrate resilience and adaptability.
The Golub Capital Altman Index provides early insight into the financial performance and GDP of publicly traded companies ahead of earnings season.
NEW YORK, Oct. 9, 2024–(BUSINESS WIRE)–Private middle-market companies included in the Golub Capital Altman Index reported earnings of % increased. Revenue increased 5% in the same period. .
“Companies included in the Golub Capital Altman Index have experienced eight consecutive quarters of strong revenue and profit growth,” said Lawrence E. Golub, CEO of Golub Capital. “The cost discipline and pricing power we have emphasized throughout the company continues to pay dividends.” These encouraging trends should be viewed with caution, as for many companies in our sample, total revenue growth has significantly outpaced total revenue growth for five consecutive quarters. Strong sectors like technology also posted double-digit profit growth for the quarter, but mission-critical enterprise software providers with dominant market share and others in more fragmented and competitive markets We expect to see significant performance variation between providers. In the future, both within and between sectors. ”
“In last quarter’s report, we noted that the balance of headwinds and tailwinds facing consumers will be a key trend for investors to watch in the second half of 2024. “Consumer companies that have lost their jobs paint a mixed picture.” In Q3 2024, recent macroeconomic data, as well as solid revenue and EBITDA growth across most sectors in the aggregate and sample, suggest that consumer spending continues to outperform low expectations; The slight decline in year-over-year EBITDA indicates wage growth and EBITDA growth. With a strong labor market continuing to pressure profit margins and increasing dispersion in performance, our data shows that while many companies have successfully adapted to this environment, they are still struggling to avoid it. It shows that the ability is further behind. Problematic credit, especially for companies that are vulnerable to relatively high interest costs and able to effectively deal with problems if they arise, is likely to significantly affect investor returns going forward. ”
The Golub Capital Altman Index (“GCAI”) is the first and longest running index based on actual revenues and profits (defined as earnings before interest) created by Golub Capital in collaboration with credit expert Edward I. Altman, Ph.D. This is the index that is being used. taxes, depreciation and amortization (or “EBITDA”) for middle market companies. It measures the median revenue and profit growth of approximately 110 to 150 private U.S. companies in the loan portfolio of Golub Capital, a leading middle market lender. The GCAI is reported just before the quarterly earnings season for publicly traded companies and is a reliable indicator of the overall growth rate of revenue and profits for publicly traded companies in market indexes such as the S&P 500 and S&P SmallCap 600 (“S&P 600”). It has functioned as Calculated as quarterly gross domestic product (“GDP”), according to statistical backtesting dating back to 2012, when data tracking began.
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The size and diversity of Golub Capital’s loan portfolio ensures the confidentiality of all company-specific information used in the index, both aggregate and industry segment data.
We believe that result (1) is representative of the overall performance of middle-market companies that contribute significantly to U.S. private sector employment. (2) Easily compare the performance of listed companies that make up major stock indexes. (3) relate to the overall economic performance of the U.S. economy and (4) provide timely information to the investment community.
GCAI companies operate in a wide range of industries. Results are provided across GCAI companies and by industry segment. Because the index’s exposure is limited to financials, utilities, energy, and materials, it is compared to the S&P 500 and S&P 600, as well as “adjusted” versions of these indexes that exclude the aforementioned sectors.
About the Golub Capital Middle Market Report
The Golub Capital Middle Market Report analyzes the results of the Golub Capital Altman Index (“GCAI”). GCAI measures the median revenue and profit growth over the first two months of approximately 110 to 150 privately held companies in Golub Capital’s loan portfolio. Calendar quarter. We compare these results to the financial performance of well-known market indexes such as the S&P 500 and S&P SmallCap 600. GCAI was created by Golub Capital in collaboration with credit expert Dr. Edward I. Altman. Starting in Q2 2022, GCAI will exclude Golub Capital portfolio companies with recurring revenue-based credit facilities. The data referenced herein does not reflect all companies included in Golub Capital’s loan portfolio during the period indicated.
About Golub Capital
Golub Capital is a market-leading, award-winning direct lender and experienced private credit management company. We specialize in providing reliable, creative and attractive financing solutions to companies backed by private equity sponsors. Our sponsored finance expertise also forms the basis of our extensive syndicated loan and credit opportunity investment programs. We foster long-term, win-win partnerships that stimulate repeat business from private equity sponsors and investors.
As of July 1, 2024, Golub Capital had more than 950 employees and managed more than $70 billion in total invested capital, including leverage. The company has offices in North America, Europe, and Asia. For more information, please visit golubcapital.com.
About Dr. Edward I. Altman
A leading expert on credit markets, Dr. Edward I. Altman is the Max L. Heine Professor of Finance, Professor Emeritus of New York University’s Stern School of Business, and Director of Credit and Debt Market Research at New York University’s Salomon Research Center. There is also. Financial institution. He currently serves as an advisor to several foreign central banks. Professor Altman has published or edited 20 books and more than 150 articles in academic journals in finance, accounting, and economics. He was inducted into the Fixed Income Analysts Society Hall of Fame, served as President of the Financial Management Association, was an FMA Fellow, and was one of the first inductees into the Turnaround Management Association Hall of Fame. He earned an MBA and a Ph.D. in Finance from the University of California, Los Angeles.
Important notice
The Golub Capital Altman Index is provided as an indicator only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any security. Some of these statements constitute forward-looking statements, which may be predictions about future events, future operating results, or future financial condition. Some of these statements reflect opinions based on data presented in the index, and these opinions may be incorrect. Actual results may differ materially from those implied or expressed in such forward-looking statements for any reason. The Golub Capital Altman Index is constructed based on information provided by third-party sources believed to be reliable, but that information has not been independently verified by Golub Capital. Golub Capital makes no warranties or representations as to the accuracy or completeness of such third party information.
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