Michael Dell-backed investment group merges with Warren Buffett’s favoured advisory firm

MSD Partners, a company set up by Michael Dell, is merging with Byron Trott’s BDT merchant bank, creating an advisory and investment group that counts some of the world’s highest-profile billionaires and entrepreneurs as clients.

The new group aims to capitalise on the wave of new fortunes forged as entrepreneurs founded companies during the two-decade-long tech boom while also advising the heirs of older family businesses. The two companies will together manage about $50bn.

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

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

The deal marries BDT and its rolodex of some of the world’s wealthiest people with MSD, a fast-growing private capital group created by Dell. 

Chicago-based BDT, which has advised on a string of transactions, including JAB Holding’s $19bn purchase of Dr Pepper Snapple, is currently raising its fourth fund for $10.4bn and manages more than $30bn. 

It also has arranged large private equity buyouts. In 2010, BDT led a controlling investment in Weber, a popular maker of barbecue grills, which it then took public in 2021 at a near $5bn valuation. Weber’s stock has fallen by about two-thirds since the listing.

“The cultures of the two firms are very consistent, and I am committed to supporting Gregg, Byron and their combined team in continuing to build a special investment firm to last for generations,” said Dell, who will chair the combined group.

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

Following the financial crisis, Dell broadened his family office to create MSD, which has developed into an investment company that has raised funds from outside investors and targeted midsized buyouts as well as putting money into real estate and credit.

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

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