BySergei Klebnikov,
Forbes Staff.
Lawrence Golub, billionaire founder and CEO of private credit firm Golub Capital, emphatically dismissed fears that the rapid growth of private credit, specifically direct lending, is leading to a bubble. Speaking at the ninth annual Forbes/SHOOK Top Advisor Summit in Las Vegas, NV, on Friday, Golub argued that direct lending continues to offer investors superior risk-adjusted returns and acts as a necessary hedging tool for traditional 60/40 portfolios with stocks and bonds.
"It's for sure not a bubble," he said to a room full of financial advisors. Golub—who has a net worth of $3.3 billion, according to Forbes—asserted that an allocation to private credit and direct lending improves the risk-adjusted return of a traditional 60/40 portfolio: “The returns from direct lending across decades are often better than half of private equity funds.”
Golub’s comments were delivered at a time when private credit business has come under attack thanks to the bankruptcy filing of Ohio auto parts conglomerate First Brands, which binged on off balance-sheet direct loans, and currently owes creditors including Jefferies, UBS and Nomura, at least $10 billion.
