How Byron Trott became the favorite banker of Warren Buffett and America's wealthiest families

Byron Trott's BDT & MSD Partners — formed from his merchant bank and Michael Dell's MSD Partners — has emerged as a go-to adviser and capital partner for wealthy, family-led businesses, managing roughly $70 billion with 95% of investors drawn from active business owners, family offices and foundations and with Dell as the largest investor and chair of the advisory council. The firm has advised on high-profile transactions (Patagonia’s transfer, Shari Redstone’s $8 billion Paramount-Skydance deal, the $6.1 billion Celtics sale, the Orioles purchase) and participated in growth financings such as Skims at a $5 billion valuation, while launching a tech fund that raised over $800 million, leveraging a network that includes Spotify, Stripe and Airbnb founders. Its rise underscores two industry shifts — the growing importance of patient, family capital as companies stay private longer and the surge in direct-investing by family offices — and signals that BDT & MSD is well positioned to channel large, relationship-driven private-market flows into tech and other sectors, even as it warns clients about the due-diligence risks of direct deals.

Analysis

BDT & MSD Partners, formed by Byron Trott’s merchant bank and Michael Dell’s MSD Partners in 2023, manages roughly $70 billion with 95% of its investors comprised of active business owners, family offices and foundations; Dell is the largest investor and chairs the advisory council. The firm has advised on high-profile, large transactions including Patagonia’s transfer to a trust/nonprofit, Shari Redstone’s role in the $8 billion Paramount-Skydance deal, the $6.1 billion sale of the Boston Celtics, and participated in Skims’ financing at a reported $5 billion valuation.

BDT & MSD positions itself as a conduit for “patient capital” as companies stay private longer, demonstrated by a tech fund that raised more than $800 million in three months and a network that includes founders from Spotify, Stripe, Qualtrics and Airbnb. The firm’s model—pairing long-term family capital with founder-led tech opportunities—creates proprietary co-invest and direct-deal flows that conventional managers may not access.

The dominant industry trend is a shift toward direct investing by family offices, but Trott and Lemkau explicitly warn of due-diligence and capability gaps; the firm advises families to start with top funds before moving to direct deals. The combination of succession, values-based next-generation preferences, and relationship-driven capital means BDT & MSD’s influence is strategically significant yet likely to produce modest near-term public-market impact, consistent with the moderately positive sentiment and low market-impact signals provided.

Key Decisions for Investors

• Consider allocating a portion of private-market exposure to managers with deep family-office networks and proven direct-deal track records like BDT & MSD to access late-stage/private tech and bespoke transactions, given the firm’s $70 billion scale and rapid $800 million tech fund close
• If contemplating direct investing or advising family offices, require demonstrable fund experience first and enforce rigorous operational, legal and commercial due diligence, reflecting Trott’s guidance that direct investing is difficult without the right team
• Monitor BDT & MSD participation and announced deals (e.g., Skims, Patagonia, Paramount-related transactions) as forward indicators of private-market themes and potential strategic partnerships, and use those signals when assessing thematic allocations to tech and media
• Increase liquidity buffers or allocate to private credit to manage the illiquidity and longer holding periods associated with family-office patient capital, since the trend toward staying private longer can delay public-market catalysts
• For exposure to entities tied to the firm’s network (notably Dell’s role as largest investor and chair), evaluate potential strategic alignment but base position decisions on each company’s standalone fundamentals rather than presumptive spillover effects