Investment group

Michael Dell-backed investment group merges with Warren Buffett’s favorite consulting firm

MSD Partners, a company founded by Michael Dell, is merging with Byron Trott’s investment bank BDT, creating an advisory and investment group that counts some of the world’s most prominent billionaires and entrepreneurs among its clients.

The new group aims to capitalize on the wave of new fortunes forged when entrepreneurs founded companies during the two-decade tech boom, while advising heirs to older family businesses. The two companies will together manage around $50 billion.

Trott, a former Goldman Sachs partner known on Wall Street as the banker to the billionaires, is a close adviser and co-investor of Warren Buffett, the Pritzker family behind the Hyatt hotel empire and descendants of the founder of Walmart. , Sam Walton.

Trott will lead the merged company with Gregg Lemkau, who has run MSD since joining Goldman’s group in 2021. Lemkau is best known as a key adviser to some of Silicon Valley’s most colorful billionaires, including the Tesla boss. , Elon Musk, Twitter founder Jack Dorsey. and Travis Kalanick, who created Uber.

The deal marries BDT and its rolodex of some of the world’s richest people with MSD, a fast-growing private equity group set up by Dell.

Chicago-based BDT, which advised on a series of deals including JAB Holding’s $19 billion purchase of Dr Pepper Snapple, is now raising its fourth fund for $10.4 billion and managing more than $30 billion. of dollars.

He also arranged significant private equity buyouts. In 2010, BDT led a majority investment in Weber, a popular barbecue maker, which it then took public in 2021 at a valuation of nearly $5 billion. Weber shares have fallen about two-thirds since listing.

“The cultures of both companies are very cohesive, and I am committed to supporting Gregg, Byron and their combined team as they continue to build a special investment company that will last for generations,” said Dell, who will chair the combined group.

While Dell built his fortune on Dell Technologies, the computer maker he founded, he has since relied on the family office he started to manage his wealth.

Following the financial crisis, Dell expanded its family office to create MSD, which became an investment company that raised funds from outside investors and targeted mid-size buyouts, as well as real estate investments. and credit.

Faced with the risk of being rendered obsolete by new technology, the PC maker has reinvented itself over the past decade into a larger tech empire with close ties to buyout group Silver Lake Partners.

Ardea Partners, a boutique investment bank set up by former Goldman Sachs bankers, acted as financial adviser on the deal.