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Hello PitchDeckGuy readers!

Introduction

In today's newsletter, we're diving into Golub Capital Partners 15, L.P.'s institutional investor pitch deck. This presentation is a masterclass in how to position a middle market lending strategy to sophisticated institutional investors in today's challenging economic landscape.

What makes this pitch so interesting isn't just the technical substance (though there's plenty of that). It's how Golub balances the numbers with narrative, creating a presentation that feels both quantitatively rigorous and strategically coherent. In a world where most institutional pitches either overwhelm you with data or rely too heavily on vague claims, this one strikes a refreshing balance.

Let's examine this presentation slide by slide and see what makes it effective – and what we can all learn from their approach.

Overview of Golub Capital

Golub kicks things off by establishing their institutional credibility immediately. This opening slide is direct and powerful – 25+ years in business, $60+ billion under management, and 825 employees including 170 investment professionals focused on middle market lending.

What works particularly well here is the clarity. Instead of beginning with market commentary, they simply tell you what they do: "first lien first out senior secured floating rate loans" to sponsor-backed companies. No unnecessary jargon – just straightforward language about their focus.

The slide subtly mentions they've been a "top 3 middle market bookrunner for each of the last 10 years" – the investment equivalent of casually mentioning a decade of market leadership. And notice how they immediately reference "recession-resilient industries" and "consistent returns" – addressing the risk question before investors even ask it. Strategically brilliant.

Extensive Product Suite

With their credibility established, Golub showcases their product lineup. This isn't merely displaying options – it's strategic. They're demonstrating platform breadth while simultaneously helping investors understand exactly where GCP 15 fits in their ecosystem.

The table format here is excellent in its simplicity. Investors can immediately see the leverage profiles and target returns across different vehicles. It effectively functions as a menu that allows institutional investors to quickly identify which offering best suits their investment parameters.

I particularly appreciate how they've categorized their BDC offerings by structure – public, private-to-public, and stay private. It signals sophistication through organization rather than explicit claims. The clear IRR targets for each product demonstrate transparency and save everyone valuable time.

No ambiguity, no hidden details – just clear options and expectations laid out efficiently. This is how you build credibility with institutional investors who appreciate directness.

Long-Standing Track Record of Low Default Rates

This slide is where Golub truly demonstrates excellence. For credit managers, default rates are the ultimate performance metric, and Golub's record is exceptional.

The visual comparison between their 0.90% default rate and the Leveraged Loan Index's 2.07% is immediately compelling. It effectively communicates "The market experiences significant risk, we experience minimal risk." Even more impressive is their payment default rate of just 0.54%, showing they don't just avoid defaults – they identify problems early and address them before they become defaults.

The callout boxes are particularly effective: zero payment defaults during COVID-19 when markets were in turmoil, and just 1.35% during the Global Financial Crisis when credit markets faced unprecedented stress. This isn't theoretical risk management – it's performance tested in the most challenging conditions.

And that 0.02% average annual loss rate since 2004? Remarkable. It tells investors that even when borrowers do default, Golub recovers capital extremely effectively.

This slide transforms risk management from abstract promises into compelling historical data. And for institutional fundraising, that's incredibly valuable.

The Golub Capital Advantage

This slide is exceptionally well-designed. Instead of a conventional list of advantages, Golub illustrates how their business functions as a self-reinforcing system.

The circular design shows how each element strengthens the next: their sponsor relationships drive deal flow, enabling disciplined selection, leading to low defaults, which gives them better financing, driving better returns, growing their capital, and making them even more attractive to sponsors. It's not just a collection of strengths – it's a mechanism that generates sustainable competitive advantage.

The different colors for each segment enhance visual clarity while maintaining organizational coherence. The explanatory text around the circle adds necessary detail without overwhelming the core visual.

What makes this work is that it transforms a potentially dry explanation into a compelling story about how their business creates and maintains its edge. For institutional investors who've reviewed countless pitch decks, this conceptual clarity stands out significantly compared to typical presentations.

Broad Sponsor Finance Platform

Here Golub backs up their claims with substantial evidence. They don't merely assert "we have great relationships" – they demonstrate exactly what that means: 350+ sponsor relationships, 250+ repeat sponsor relationships, and hold sizes ranging from $25-700MM, showing they can operate effectively across the middle market spectrum.

The growth chart tells a compelling story – from $3.1 billion in originations in 2013 to a peak of $25.3 billion in 2021. That represents exceptional growth in market presence. And the second chart showing 89-94% of origination volume from repeat sponsors? That's the relationship quality metric that truly matters.

The explanations of their advantages for sponsors and their distinctive financing solutions add important context without overwhelming. This slide effectively transforms qualitative relationship claims into quantifiable competitive advantages with concrete historical evidence.

The Sponsor Advantage

This slide effectively explains why lending to sponsor-backed companies isn't merely a preference – it's a structural advantage for credit quality. The organization around three phases of credit lifecycle – selection, performance, and problem-solving – creates a comprehensive framework.

The empirical data showing sponsor-backed loans have 1.8% default rates versus 2.5% for non-sponsored companies provides compelling evidence that resonates with institutional investors. This isn't theoretical; it's demonstrated performance.

Each section clearly articulates the sponsor advantage at that stage – from initial filtering and credit-enhancing strategies, to aligned ownership and operational resources during the holding period, to their ability to provide additional capital or change management when challenges arise.

The excellence of this slide is how it reframes their sponsor focus from being primarily about sourcing to being fundamentally about superior credit. For institutional investors, this clearly demonstrates why Golub's approach represents a structural advantage in credit investing.

Attractive Opportunities From Existing Borrowers

This slide showcases another key advantage – their ability to capture repeat business from existing borrowers. The data showing 49-72% of origination coming from repeat borrowers speaks to both relationship quality and information advantage.

The case studies are impressive – growing from $290 million to $2.2 billion with one borrower and from $36 million to $830 million with another. These represent compelling stories of long-term partnership and value creation.

The explanatory text effectively communicates why these relationships matter for investors – Golub's deep knowledge of these companies gives them an edge in risk assessment. And the point about how their existing portfolio provides deal flow independent of broader M&A cycles? That's precisely the kind of origination resilience institutional investors value.

This slide reinforces their relationship-driven model while connecting it directly to superior risk-adjusted returns – bridging the gap between qualitative advantage and quantitative results.

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Lead Lender Capabilities

This slide addresses the critical distinction between being a lead lender versus merely a participant – and why it matters for both returns and risk management. The chart showing consistently high percentages (88-95%) of origination with Golub as lead lender demonstrates this isn't occasional; it's their standard practice.

The advantages section clearly articulates why being lead matters: controlling terms, higher fees, better access during diligence, stronger monitoring capabilities, and incumbency benefits for future deals.

I particularly value how they break down the monitoring advantages into specific benefits: direct access to sponsors and borrowers, first access to financial information, early problem detection, and control in workouts. This detailed explanation helps investors understand why lead lender status isn't just about economics – it's about proactive risk management and maintaining control when challenges emerge.

For institutional investors who require both returns and downside protection, this slide effectively demonstrates why Golub's consistent lead position delivers on both priorities.

Rigorous and Disciplined Approach to Underwriting

This slide addresses the fundamental question for credit investors: how do you ensure discipline across market cycles? The design with checkmark bullets progressing from light to dark blue creates visual interest while highlighting their key risk management practices.

Each bullet addresses a specific aspect of their approach, from their originators' experience (10+ years) to their incentive structure (compensation based on performance, not volume), their downside focus (distressed sale value as "second way out"), their organizational checks and balances, and their monitoring infrastructure.

What works particularly well is the balance between high-level principles and specific operational details – showing both the philosophy and its practical implementation. For institutional investors who've seen numerous firms lose discipline as they scale, this explanation of both culture and structure creates confidence in Golub's ability to maintain quality as they grow.

Low Long-Term Default Rate Enables Attractive Leverage Terms

This slide brilliantly connects their credit performance to a tangible business advantage – access to superior leverage. The three-column structure organizes the information effectively: Experienced Issuer, Dedicated Team, and Strong Track Record & Lender Relationships.

The statistics are compelling: #1 issuer of middle market securitizations, 125+ active debt facilities, 90+ securitizations executed, 40+ treasury professionals with 18+ years average experience, and relationships with 250+ debt investors.

The most powerful statistic is elegantly simple: "0 Losses for all financing partners." That single data point explains why they can access financing that others cannot, at terms others don't receive.

This slide completes another link in their virtuous cycle – showing how strong credit performance translates into financing advantage, which drives returns. It's another example of how their presentation demonstrates not just isolated strengths but a connected system of competitive advantages.

Consistent Premium Fund Returns

The results speak volumes, and this slide presents the returns comparison in visually compelling form. The charts comparing return distributions since inception immediately show how both their private funds (GCP) and public BDC (GBDC) have delivered higher percentages of returns in the 2-5% quarterly range compared to benchmarks.

The data showing only 4% of GCP quarterly returns and 8% of GBDC returns below 1.0%, versus 33% and 27% for benchmarks, demonstrates their downside protection isn't theoretical – it's historical fact.

What's particularly effective is how the comparison shows not just better performance but better consistency – fewer significant down quarters and fewer extreme up quarters. For institutional investors who value predictability over occasional outsized returns, these distribution charts tell exactly the story they want to hear.

Growth in Capital Under Management

This slide effectively traces Golub's journey from 1994 to today, highlighting key innovations and milestones. The timeline format creates a clear narrative of continuous evolution and expansion of capabilities.

The highlights – pioneering the unitranche loan, executing their first securitization, launching their GCP structure, IPO'ing GBDC, and developing specialized solutions for high-growth companies and cross-border deals – show how they've consistently innovated while maintaining their core middle market focus.

Concluding with their record 2022 originations ($38 billion across 370 transactions) demonstrates their continued momentum despite challenging market conditions.

This historical perspective helps investors understand Golub's evolution from specialist lender to comprehensive credit platform – showing both stability in focus and adaptability in approach, qualities that institutional investors value highly in long-term partners.

Track Record Through Multiple Economic Crises

This slide delivers perhaps the most compelling evidence of Golub's resilience through market volatility. The chart showing quarterly returns from 2004 through Q2 2023 creates immediate impact, illustrating performance across multiple market cycles and economic shocks.

The callouts highlighting specific challenges – the Global Financial Crisis, Credit Rating Downgrade, Taper Tantrum, Energy Sell-off, Recession Scare, COVID-19, and 2022 Market Downturn – contextualize their performance during periods when many managers struggled.

The fact that they've had only three negative quarters in 15+ years, with quick recoveries each time, is impressive. The note that their Q2 2022 decline was just -0.1% further underscores their stability.

For institutional investors concerned about how strategies perform when markets become volatile, this slide provides concrete historical evidence of Golub's ability to weather various types of market stress. The nearly two decades of data creates confidence in their resilience through whatever challenges may emerge next.

A Compelling Investment Opportunity

This slide brings everything together with a clear framework: Right Strategy, Right Manager, Right Structure. This three-part approach helps investors evaluate the opportunity across the key dimensions that matter for any allocation decision.

Under "Right Strategy," they position middle market lending as designed for uncertain times, highlighting premium yields, interest rate protection, and strong security – addressing key concerns in today's environment.

The "Right Manager" section emphasizes Golub's market leadership, direct origination model, product range, long history, and proprietary sourcing – differentiating them from competitors.

In "Right Structure," they focus on the GCP 15 Funds specifically, highlighting historical returns, investor-friendly fees, low volatility, and alignment through $1+ billion of employee/family capital alongside investors.

This three-part framework provides a comprehensive yet digestible summary of the opportunity. The organization helps investors evaluate each aspect while understanding how they work together to create a compelling overall proposition.

The U.S. Middle Market Opportunity

This slide makes the case for the middle market opportunity with both scale and specificity. The stats section uses bold gold numbers for immediate impact: 200,000 businesses, 48MM jobs, 33% of private sector GDP – emphasizing the sheer size of this market.

The market share chart shows the dramatic shift from banks to financial institutions since 1997, illustrating the structural opportunity for specialized lenders like Golub.

The private equity dry powder chart showing growth from $650 billion to $1.8+ trillion provides evidence of the capital available to drive sponsor-backed deals – Golub's primary focus.

The growth chart comparing middle market companies to large-cap, small-cap, and GDP growth demonstrates the superior fundamental performance of this segment over time.

Together, these perspectives create a comprehensive case for why the U.S. middle market represents a massive, growing, and structurally advantaged opportunity for specialized lenders like Golub.

Conclusion

What makes Golub Capital's pitch so effective isn't any single slide – it's how the entire presentation works together to tell a coherent and compelling story. Here's what sets it apart from typical institutional pitches:

First, they don't simply make claims – they support everything with specific metrics and historical evidence. From default rates to sponsor relationships to return distributions, they show rather than tell.

Second, their "virtuous cycle" framework demonstrates how different parts of their business reinforce each other, creating sustainable advantages rather than isolated strengths that competitors could easily replicate.

Third, by showing performance through multiple market cycles and their evolution over decades, they create confidence in their ability to navigate whatever comes next – something institutional investors value tremendously in today's uncertain environment.

Fourth, they clearly articulate why their approach – sponsor-focused, lead-lender, relationship-driven – creates advantages in both returns and risk management compared to alternatives.

Finally, their "Right Strategy, Right Manager, Right Structure" framework provides a clear evaluation structure that addresses the key questions institutional investors need to answer before making an allocation.

For investment managers raising capital today, Golub's pitch offers valuable lessons in combining narrative with evidence to create a compelling investment case. They've transformed a complex strategy into a clear value proposition that resonates with sophisticated institutional investors – a notable achievement in an industry often characterized by either excessive complexity or marketing generalizations.

I welcome your feedback on this analysis as we continue to examine best practices in institutional fundraising.

See you next Friday, PitchDeckGuy

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