Last month, Daniel Shefter, a 20-plus-year veteran of Goldman Sachs who rose up the ranks to become a managing director and eventually a partner, left to become a New York-based partner at BDT & Company, a Chicago-headquartered merchant bank that manages approximately $12bn in affiliated investment funds with advisory services to family- and founder-led businesses.
After graduating from Columbia University with a dual MBA and JD, Shefter started his career as an associate at Skadden, Arps, Slate, Meagher & Flom, which Forbes dubbed “Wall Street’s most powerful law firm.” He joined Goldman in 1996 and gained a reputation for his skill in designing complex securities, rising to MD in 2002 and eventually making partner.
Shefter retired in 2014 but continued working as an advisory director at Goldman and started teaching complex deal structuring courses at Columbia Law School.
Now, he’s getting back into the game at BDT & Co., the merchant-banking unit of BDT Capital Partners. It’s a secretive hybrid multi-family office, private equity and investment banking firm founded by Byron Trott, a former partner and vice chairman of investment banking at Goldman.
Hank Paulson tapped Trott to succeed him as the head of Goldman’s Chicago office when he was promoted to CEO, and Trott became Warren Buffett’s personal investment banker. Buffett once mentioned Trott in his annual letter to shareholders: “He understands Berkshire far better than any investment banker with whom we have talked and – it hurts me to say this – earns his fee.”
Trott left Goldman to start BDT in 2009. Despite having approximately $12bn in assets under management, BDT keeps a low profile, because its elite clientele – primarily billionaires and dynastic families such as the Waltons, Pritzkers, Reimanns and Webers – value privacy and discretion.
It has more than 150 employees across four offices in Chicago, New York, London and Frankfurt, Germany, and Trott is on a hiring spree, with Shefter and many others from his former firm.
The Goldman alumni include partner and COO San Orr, a longtime colleague at Goldman Sachs who deals directly with the Walton family; partner Robbie Robinson, who took a temporary leave from BDT to work on the Obama family’s finances; Noa Meyer, who leads BDT's philanthropic activities; and Dan Jester, who worked for Paulson at Treasury Department during the financial crisis.
Ex-Goldmanite John Dills left BDT in March to become the CEO of Great Plains Capital, so Shefter is effectively taking his place among BDT's partners. One Goldman alumnus leaves and another joins.
What is more, the midlevel ranks are stocked with former members of Trott’s team at Goldman, according to Crain’s Chicago Business.
BDT also hired Jim Head, the former co-head of mergers and acquisitions in the Americas at Morgan Stanley, as a partner in 2016.
BDT’s structure is unique because it doesn’t have traditional practice areas, such as the financial institutions group, consumer products or energy – everyone’s a generalist. In addition, BDT personnel of all levels work on both advisory and investment deals. Sometimes, BDT will advise multiple parties involved in a particular deal and invest its own capital as well.
Trott told Fortune that a BDT banker needs three skills: “You’ve got to be a black belt in investment banking. You’ve got to be a black belt at investing. And you’ve got to be part psychologist in dealing with families and business owners.”
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