Goldman veteran to start merchant banking firm

Byron Trott is leaving Goldman Sachs after 27 years to launch a firm that will invest in and advise family-owned businesses. The merchant bank will look to raise an initial $2bn and has has backing from billionaire investor Warren Buffet’s Berkshire Hathaway.

Byron Trott, an investment banker with Goldman Sachs, is leaving the firm after 27 years to found BDT Capital Partners, a merchant banking firm.

Trott is trying to raise up to $2 billion to invest in and advise family-controlled businesses, according to a source with knowledge of the situation.

Warren Buffett, whom Trott has advised on deals throughout his career, will reportedly back the firm, according to various media reports. Trott brokered Buffett’s $5 billion investment in Goldman Sachs last year. Buffett told the Wall Street Journal his company, Berkshire Hathaway, will have a “modest partnership interest” in the firm. “We will not be the big dog,” Buffett said.

Trott was also involved in a deal in 2007 in which Goldman Sachs Capital Partners teamed up with Wal-Mart-affiliated Madrone Capital Partners to invest $1 billion for a minority stake in Global Hyatt Corporation. The hotel group’s owners, the Pritzker family, was in the process of splitting assets held among family members and the buyout firms’ investment was intended to aid the process. As part of the deal, Trott joined the group’s board of directors.