Mr Byron Trott (pictured) made a name for himself orchestrating a series of deals for Mr Warren Buffett’s Berkshire Hathaway.
(BLOOMBERG) – Mr Byron Trott, consigliere to some of the world’s wealthiest families, doesn’t like being called the billionaires’ banker.
After all, the 62-year-old is a billionaire himself.
Mr Trott, who founded BDT Capital Partners, has quietly amassed a US$3.6 billion (S$4.9 billion) fortune, according to the Bloomberg Billionaires Index, making the former Goldman Sachs Group executive as wealthy as some of his better-known clients.
Born in a small town in Missouri, the son of a telephone-line repairman and dress-shop owner, Mr Trott laid the foundations by initially advising some of the world’s most successful investors, especially Mr Warren Buffett, during an almost three-decade run at Goldman Sachs. After leaving in 2009, he started his own Chicago-based advisory and private equity firm, where assets have rapidly swelled to US$28 billion.
One of his firm’s first investments, Weber, went public this month. While BDT is the grill-maker’s majority owner, Mr Trott and his family personally own a 5 per cent stake worth US$240 million, a regulatory filing shows.
Weber was a typical BDT investment: family-owned and often founder-led. Other investments include Whataburger Restaurants, Cox Automotive, Casa Dragones Tequila and German car parts manufacturer Schaeffler.
“I think of BDT’s purpose being to serve and add value to their clients, and their clients are largely family-run businesses,” said Mr Tom Pritzker, a client of Mr Trott’s for decades and chief executive of the Pritzker Organisation. “If they do that well, if they add value to those family-run businesses, the consequence will be profit.”
Mr Trott joined Goldman Sachs after graduating from the University of Chicago, where he played varsity baseball as an undergraduate before securing his MBA from the Booth School of Business. He started as a stockbroker and then worked as a wealth manager in St Louis, where he caught the eye of Mr Hank Paulson, then manager of the bank’s Midwest operations. Mr Paulson, who would become the firm’s CEO and later US Treasury secretary, tapped him to join the investment banking group.
“I loved bringing the investing and investment banking disciplines together and soon realised the value added that I could provide, especially to entrepreneurs and the leaders of family-owned companies,” Mr Trott said in a 2011 biographical sketch for his acceptance into the Horatio Alger Association, a privately funded college scholarship provider.
He also made a name for himself orchestrating a series of deals for Mr Buffett’s Berkshire Hathaway, prompting the Omaha billionaire to praise 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,” Mr Buffett wrote in 2004.
Mr Trott rose to become vice-chairman of investment banking at Goldman Sachs and headed its Chicago office. In 2008, he pulled off one of the most consequential deals in modern Wall Street history, negotiating Berkshire’s US$5 billion investment in Goldman Sachs during the peak of the financial crisis, helping shore up the bank’s capital base and restore market confidence.
The banker’s Rolodex, though, extended far beyond Mr Buffett. The Waltons, Kochs, Wrigleys and Pritzkers have all been linked to him, and many of these dynasties have invested in BDT’s funds, sold parts of their business to the private equity firm, or both.
Mr Trott co-founded the firm with Mr William Bush, previously a lawyer at Fulbright & Jaworski. Other long-time partners include fellow Goldman alumni San Orr and Dan Jester. It continues to draw heavily on the bank for talent – LinkedIn data shows 28 individuals working for BDT who had previously worked at Goldman. The company also has offices in New York, Los Angeles, Dallas, London and Frankfurt, and employs 157 people.
While other large private equity firms have moved away from reliance on one person, BDT remains largely synonymous with Mr Trott.
That’s not deterring investors, however. BDT raised US$9.1 billion for its third investment fund last year. Since the Weber deal was struck in 2010, the firm’s assets under management have grown to about US$28 billion at the start of this year, just shy of the US$32 billion managed by Bridgepoint Group, which went public last month at a valuation of about US$4 billion.
Mr Trott owns at least 50 per cent of BDT and is estimated to have more than US$1.7 billion personally invested in its funds. Weber was the second BDT portfolio company to go public this year, following Krispy Kreme’s debut. BDT holds an 8.6 per cent stake in the doughnut maker.
BDT has “a culture of being a sophisticated thought partner for family-run businesses”, Mr Pritzker said. “That includes confidentiality. It’s a huge deal there – it creates a framework of trust.”Internet Explorer Channel Network