A $45 billion credit fund manager says the Fed is 'way, way, way behind the curve' on inflation

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Lawrence Golub helms one of the largest private credit shops in the alternative finance space. His eponymous firm, Golub Capital, has $45 billion in assets under management. That's no small feat against a backdrop where private debt AUM is expected to total $2.7 trillion by 2026. 

While private debt has skyrocketed recently, inflation and rising interest rates could pose new challenges. Golub sat down with CNBC's Delivering Alpha newsletter to discuss how these headwinds impact his firm's lending strategy and where he thinks the Fed went wrong in taming inflation. 

(The below has been edited for length and clarity. See above for full video.)

Leslie Picker: Private credit is floating rates so it still may be an attractive asset to investors in a rising interest rate environment. But how does the broader macro backdrop change the way you dole out capital?

Lawrence Golub: We're looking for resiliency in the borrower against things that could go wrong. So when you have interest rates rising, it does reduce the margin of safety somewhat, when you're looking at the ability of the company to service its debt. That has to be taken in the broader context of what's going on with the economy as a whole and the economy really is doing very, very well. The inflation is driven by strength, not weakness. And in this environment, our portfolio has been performing at among the best levels ever, in terms of very low default rates. And it's been a very robust, healthy environment.

Picker: What's interesting is that your lending covers a swath of the economy that we don't always see — it's private companies, middle market, increasingly larger companies. What