Byron Trott and Gregg Lemkau climbed the ranks within Goldman Sachs Group Inc., ascending to the top of its prestigious investment bank.
They’re now combining the firms they lead after exiting Goldman. Trott’s merchant bank BDT & Co. is merging with Michael Dell’s MSD Partners, which Lemkau joined last year as chief executive officer.
The transaction, expected to close in early 2023, will create a firm overseen by Trott and Lemkau as co-CEOs, according to a statement. Dell, who has a net worth estimated by the Bloomberg Billionaires Index of $43.4 billion, will be chairman of the advisory board.
“Together, we will focus on providing comprehensive solutions that address the distinct needs of a global network of like-minded investors and family-and founder-led business owners,” Lemkau, 53, Goldman’s former investment-banking head, wrote in a letter seen by Bloomberg.
The two firms have invested more than $50 billion since 2010. BDT specializes in providing advisory services to high net-worth families and their businesses and investing in family-owned companies. MSD, which grew out of Dell’s multibillion-dollar family office, invests in private firms, while also making credit, real estate and growth equity investments.
Those three asset classes are “areas that many of you have told us are important to you,” Trott, 63, wrote in a letter. “MSD’s specialist expertise in technology will also expand both our advisory and investment competencies, which we believe will benefit our core BDT funds.”
BDT is in the process of raising money for its fourth fund. The firm has about $10.4 billion in commitments as of its most recent close and plans a final close early in 2023, which will put it “in a very strong position to deploy capital in a highly attractive market environment,” Trott wrote.
Trott started Chicago-based BDT in 2009 after spending almost three decades at Goldman, where he worked with clients including Warren Buffett and the Pritzker, Walton and Koch families.
Now a billionaire in his own right, Trott gained a measure of fame after Buffett praised him in a letter to investors.
“He understands Berkshire far better than any investment banker with whom we have talked and — it hurts me to say this — earns his fee,” the Berkshire Hathaway Inc. CEO wrote in 2004.
In 2008, Trott negotiated Berkshire’s $5 billion investment in Goldman during the peak of the financial crisis, helping shore up the bank’s capital base and restore market confidence. He rose to become vice chairman of investment banking and headed Goldman’s Chicago office before starting his own firm.
Dell, Trott and Lemkau have known each for decades and have “collaborated on recent initiatives,” Lemkau wrote.
“Our investment teams will gain access to BDT’s global network of approximately 250 business-owning clients, an extraordinary sourcing engine,” he wrote.
The Wall Street Journal first reported the merger.
