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Golub Capital

Middle Market Report

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Golub Capital Middle Market Report

Featuring the Golub Capital Altman Index

Q4 2023

 

U.S. Middle Market Performance Remains Strong, Defying Consensus


Private Equity Backed Companies Exceed Performance Expectations

Middle market private companies in the Golub Capital Altman Index grew earnings by 16% during the first two months of the fourth quarter of 2023, the highest year-over-year earnings growth since Q2 of 2021. Revenue grew 7% during the same period.

The Golub Capital Altman Index can provide early insight into financial performance of public companies and GDP in advance of earnings season.

Golub Capital Altman Index Highlights

Year-Over-Year (YoY) Growth Revenue Earnings
Q4 2023 7.4% 16.3%
Key Sectors Q4 2023 (YoY) Revenue Earnings
Consumer 4.8% 13.8%
Healthcare 6.7% 11.4%
Industrials 6.8% 10.6%
Technology 11.5% 37.0%

Source: Golub Capital Internal Data.

Lawrence E. Golub, CEO of Golub Capital, said:

We expected to see strong growth in Q4 2023 and the data exceeded even our expectations. As we said throughout 2023, private equity-owned middle market companies in general are proving resilient and adapting well to the environment. Our middle market report has also performed well. Every quarter in 2023, our data provided consistently correct early insight that economic growth was exceeding the prevailing consensus. The strong revenue and earnings growth of the Golub Capital Altman Index in Q4 2023, in our view, caps off a year that bodes well for investors in private equity. Despite concern about the potential impact of high interest rates and economic uncertainty on the returns of recent private equity fund vintages, fundamental earnings growth gives investors a reason for cautious optimism.

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Reports Archive

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Golub Capital Middle Market Report Featuring the Golub Capital Altman Index Q2 2024 U.S. Middle Market Performance Remains Consistent Private equity backed companies show solid revenue and earnings growth, consistent with the last 7 quarters. Middle market private companies in the Golub Capital Altman Index grew earnings by 11% during the first two months of the second […]
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Golub Capital Middle Market Report Featuring the Golub Capital Altman Index Q1 2024 U.S. Middle Market Fundamental Earnings Growth Remains Consistent Companies have flexibility to manage the ongoing high interest rate environment Middle market private companies in the Golub Capital Altman Index grew earnings by 11% during the first two months of the first quarter […]
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January 09, 2024
Q4 2023: U.S. Middle Market Performance Remains Strong, Defying Consensus
Golub Capital Middle Market Report Featuring the Golub Capital Altman Index Q4 2023 U.S. Middle Market Performance Remains Strong, Defying Consensus Private Equity Backed Companies Exceed Performance Expectations Middle market private companies in the Golub Capital Altman Index grew earnings by 16% during the first two months of the fourth quarter of 2023, the highest […]
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October 13, 2023
Q3 2023: U.S. Middle Market Shows Strongest Earnings Growth in Two Years
Golub Capital Middle Market Report Featuring the Golub Capital Altman Index Q3 2023 U.S. Middle Market Shows Strongest Earnings Growth in Two Years Middle market private companies in the Golub Capital Altman Index grew earnings by 13% during the first two months of the third quarter of 2023, the highest year-over-year earnings growth since Q3 […]
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About the Golub Capital Altman Index

The Golub Capital Altman Index measures the actual revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) growth of US middle market private companies for the first two months of each calendar quarter and provides insight into anticipated quarterly performance of US public companies. The data referenced herein may not reflect all companies in the loan portfolio of Golub Capital during the time periods indicated.

Reported shortly before public company earnings season, the performance of the Golub Capital Altman Index has been highly correlated with the median growth rates in revenue and EBITDA of the companies in the S&P 500, S&P SmallCap 600, and Russell 2000 indexes, as well as quarterly Gross Domestic Product (GDP), since data began to be tracked in 2012.

About Dr. Edward I. Altman
A leading expert on credit markets, Dr. Edward I. Altman is the Max L. Heine Professor of Finance, Emeritus at the NYU Stern School of Business, and Director of Research in Credit and Debt Markets at the NYU Salomon Center for the Study of Financial Institutions. He is currently an advisor to several foreign central banks. Professor Altman has published or edited two-dozen books and over 150
articles in scholarly finance, accounting and economic journals. He has been inducted into the Fixed Income Analysts Society Hall of Fame, served as President of the Financial Management Association, was an FMA Fellow, and was amongst the inaugural inductees into the Turnaround Management Association Hall of Fame. He received his MBA and Ph.D. in Finance from the University of California, Los Angeles.

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Important Disclosure

The Golub Capital Altman Index is provided as an indicator only and does not constitute investment advice or the offer to sell or a solicitation to buy any security. Some of these statements constitute forward-looking statements, which may be predictions about future events, future performance, or future financial conditions. Some of these statements reflect opinions based upon the data presented in the Index, and these opinions may be incorrect. Actual results could vary materially from those implied or expressed in such forward-looking statements for any reason. The Golub Capital Altman Index has been created on the basis of information provided by third-party sources that are believed to be reliable, but the information has not been verified independently by Golub Capital. Golub Capital makes no warranty or representation as to the accuracy or completeness of such third-party information.

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  1. The Golub Capital Altman Index is provided as an indicator only and does not constitute investment advice or the offer to sell or a solicitation to buy any security. Some of these statements constitute forward-looking statements, which may be predictions about future events, future performance, or future financial conditions. Some of these statements reflect opinions based upon the data presented in the Index, and these opinions may be incorrect. Actual results could vary materially from those implied or expressed in such forward-looking statements for any reason. The Golub Capital Altman Index has been created on the basis of information provided by third-party sources that are believed to be reliable, but the information has not been verified independently by Golub Capital. Golub Capital makes no warranty or representation as to the accuracy or completeness of such third-party information.