- BDT Capital Partners
Keurig Green Mountain, the Luxembourg-owned company behind the near ubiquitous coffee pods, announced Monday it would buy Dr Pepper Snapple Group for $18.7 billion in cash.
Germany’s extremely wealthy Reimann family – the owners of JAB Holdings, which took Keurig private in 2015 – turned to someone they could trust for financial advice: Byron Trott.
Trott runs one of the most secretive investment banks in the world, BDT Capital Partners, which caters to the world’s wealthy elite who value privacy and discretion. It’s in-house merchant-bank, BDT & Company, acted as financial advisers to Keurig on the transaction, the company said. Entities affiliated with BDT Capital Partners are also investing alongside JAB.
Not heard of Trott or his eponymous company? That’s by design. Despite having more than $12 billion in assets under management, the firm doesn’t even have a public-facing website.
It does, however, have more than 150 employees spread out over four offices in Chicago, New York, London, and Frankfurt, Germany, who advise extremely wealthy clients with family-owned businesses.
The firm intentionally flies under the radar to court billionaires – like Warren Buffett, the Waltons, and the Webers, to name a few – who value privacy.
Byron Trott, a Midwest native who founded BDT, still helms the company from its downtown Chicago headquarters. Here’s how he went from a small-town football player to an investment banker advising billionaires:
Byron Trott was born in 1958 and grew up in Union, Missouri, a small town about an hour from St. Louis.
- Google Maps
Source: Horatio Alger Association.
When a teacher used him as an example of a “chubby boy,” Trott doubled-down on athletics, and he was named a “scholar-athlete” by the St. Louis Post-Dispatch newspaper.
- St. Louis Post-Dispatch
He graduated in the top 5% of his class, too.
He eventually left Union to attend the the University of Chicago, where he played first base for the school’s baseball team, before graduating in 1981.
- University of Chicago Photographic Archive, apf7-02903, Special Collections Research Center, University of Chicago Library.
He stayed on campus for another year, graduating with an MBA in 1981, and has since donated millions to the school’s scholarship efforts.
- Michael Lyons/Facebook
After graduation, Trott joined Goldman Sachs’ St. Louis office, where he worked under former Treasury Secretary Henry Paulson, who was then CEO of the investment bank.
- Brad Barket/Getty Images, inset image courtesy Goldman Sachs
Eventually Trott transitioned from wealth management to investment banking, and when Paulson (pictured above left) moved to serve as CEO of the bank in New York, Trott (right) replaced him as head of the Chicago branch.
Paulson would later be appointed as secretary of the Treasury by President George W. Bush in May 2006.
By 1994, Trott was a partner at Goldman Sachs. When the firm went public in 1999, he netted a cool $103 million bonus.
During his tenure at Goldman Sachs, Trott began to amass a client base of the wealthy and powerful, including the Pritzker family of Hyatt Hotel fame.
In 2001, Trott spent $11.5 million for a six-bedroom home on Chicago’s North Shore where he and his family live today.
- Google Maps
The home in Winnetka – an affluent suburb on Lake Michigan about 20 miles north of downtown Chicago – was designed by Ransa architects and is complete with a separate boat house and private beach.
Before leaving Goldman, Paulson introduced Trott to Warren Buffett, who was so impressed by his work for Berkshire Hathaway that he mentioned Byron by name in his 2003 letter to shareholders.
- Dimitrios Kambouris/Getty Images
“Byron has now been instrumental in three Berkshire acquisitions,” Buffett said. “He understands Berkshire far better than any investment banker with whom we have talked and – it hurts me to say this – earns his fee. I’m looking forward to deal number four (as, I am sure, is he).”
Buffett praised him again in 2007, saying: “Byron is the rare investment banker who puts himself in his client’s shoes. Charlie and I trust him completely.”
Their relationship stems back to Trott’s time at Goldman Sachs, when he persuaded the billionaire to invest $5 billion in the bank.
Trott eventually left Goldman Sachs in April 2009 and struck out on his own, founding BDT Capital Partners in Chicago.
One of BDT’s first clients was Weber-Stephen, the company behind the iconic Weber grill.
As with most of BDT’s deals, the company is an investor alongside the founding family. In the case of Weber-Stephen, BDT bought a majority stake.
BDT is unique in that it serves its clients in both advisory and investment roles, whereas a traditional firm would clearly separate the two. BDT also avoids specific practice areas for its employees. Each of its bankers is a “generalist,” allowing BDT to more seamlessly serve its wealthy and private clients, a representative of the firm told Business Insider.
When M&M’s maker, Mars Inc., bought the Wrigley chewing-gum empire for $23 billion in 2008, Byron and others future BDT employees brokered the deal with $4.4 billion in funding from Berkshire Hathaway.
- Scott Olson/Getty Images
BDT isn’t chasing quick returns. Instead, the firm wants to invest longer term, often over 10 years, so it can compound the earnings as high as 25%.
“If somebody wants five-year money, we say no,” Trott said in a rare public appearance at a private-equity conference in 2016. “We say, ‘There are a hundred other people in the world that can give you that money. Good luck.'”
Buffett’s financing of the Mars-Wrigley deal was first reported by The New York Times.
When the designer Tory Burch and her husband Christopher Burch went through a high-profile divorce, BDT bought out his 28% stake in the company.
The deal was a partnership with General Atlantic LLC, according to The Wall Street Journal.
BDT was also instrumental in the consolidation of local Anheuser-Busch distributors in the Chicago area in 2013.
The deal was exemplary of BDT’s style, in which the firm will provide large amounts of cash up front for family-owned businesses to make a transaction and then provide long-term financing for the company.
In this case, BDT helped Tennessee’s Hand Family in purchasing a 30% stake in City Beverage-Illinois LLC, Chicago’s largest Anheuser-Busch distributor.
In 2011, BDT affirmed its Chicago roots with a $33 million purchase of the iconic Wrigley Building.
- Timothy Hiatt/Getty Images
The firm purchased the historic skyscraper through a partnership with the Zeller Realty Group and Groupon cofounders Eric Lefkofsky and Brad Keywell.
The company tends to avoids most press coverage, and Trott rarely gives interviews. In January 2015, however, he was the subject of a lengthy profile in Fortune Magazine.
- Business Insider
Trott decline to comment for this article, but he told Fortune’s Adam Lashinsky that “all my life, once I accomplish something, I tend to like to find the next challenge.”
BDT often works with the Luxembourg-based JAB Holding Company, which recently bought Panera Bread for over $7 billion.
JAB, controlled by Germany’s Reimann family, added the sandwich chain to its arsenal of coffee chains that includes Peet’s Coffee & Tea, Caribou Coffee Co., Stumptown Coffee, and Keurig Green Mountain.
BDT previously advised JAB on itsacquisition of Krispy Kremefor $1.3 billion in 2016, according to data from Thomson Reuters.
Sticking with its Chicago identity, BDT bought a slice of the iconic deep-dish-pizza chain Lou Malnati’s in 2016.
As with most of BDT’s deals, the Malnati brothers remained the largest stakeholders in the 46-location pizza chain.
It’s not just deals, deals, deals, though. Trott also serves as president of the Horatio Alger Association.
- Horatio Alger Society
Named after Horatio Alger, the author of many “rags to riches” novels, the nonprofit has awarded more than $125 million to approximately 20,000 students. Trott spends hours mentoring college-bound youth through the organization.
Trott’s other philanthropic efforts have included UNICEF and The Art Institute of Chicago.
- Photo by Jeff Schear/Getty Images for UNICEF
Trott’s politics are not overt, but they do skew towards the Republican party.
- Getty Images/Bryan Bedder
Trott and his wife, Tina, donated $310,000 to a political action committee connected to Jeb Bush’s 2016 primary campaign, records show.
He previously donated to committees connected to Mitt Romney, George W. Bush, and Sen. Bob Corker. While at Goldman, records show, he made smaller donations to the 2008 Barack Obama campaign.
(BDT cofounder William Bush has no relationship to the political family of the same name, a representative of the firm confirmed.)
Another Buffett deal
In October 2017, Warren Buffett’s Berkshire Hathaway turned yet again to Byron Trott for advice as he bought up a 38.6% stake in the truck stop chain Pilot Flying J alongside longtime family owner Jimmy Haslam.
And now a deal for Dr Pepper Snapple
- Daniel Boczarski/Getty Images for Dr. Pepper
BDT & Company served as financial adviser for JAB Holding’s Keurig Green Mountain on its deal to buy Dr Pepper Snapple Group for a cool $18.7 billion in cash alongside the lead adviser Goldman Sachs.