Trilantic Capital Partners
Encyclopedia
Trilantic Capital Partners is a private equity
investment firm focused on leveraged buyout
and growth capital
investments in middle-market companies across a range of industries in the US and Europe. The firm was formerly known as Lehman Brothers Merchant Banking (LBMB), the buyout arm of Lehman Brothers
. In 2009, as part of the bankruptcy of Lehman, the LBMB business was sold to Reinet Investments
, an investment firm owned by South African businessman Johann Rupert
.
The group, which was based in New York City
, was founded in 1986 and is currently investing from a $2.6 billion fund raised prior to the bankruptcy of Lehman. Prior to the bankruptcy of Lehman, LBMB had raised four funds with aggregate commitments of $8 billion. The firm's fourth fund was reduced in size from $3.3 billion to $2.6 billion following Lehman's bankruptcy.
Among the group's most notable investments include: Blount, Inc. , Crosstex Energy , Eagle Rock Energy Partners , Flagstone Reinsurance and SRAM Corporation.
Lehman Brothers Merchant Banking was founded in 1986 in the midst of the 1980s leveraged buyout boom
to serve as the private equity arm of Lehman Brothers
. LBMB was founded just a year after Lehman's Pete Peterson
and Stephen A. Schwarzman
left the bank to found The Blackstone Group and at the same time that similar groups were founded at other investment banks including Goldman Sachs Capital Partners
, Morgan Stanley Capital Partners and DLJ Merchant Banking Partners
.
Following the departure of the Blackstone founders, Lehman restarted its private equity efforts in the late 1980s raising an investment fund with a new team of professionals led by Jim Stern, Jeff Hughes, Jamie Singleton and David Spalding. LBMB raised its first institutional
private equity fund in 1989 with $1.3 billion of capital. Capitalizing on the success of this first fund, in 1994 the four senior managing directors of LBMB left the firm to found The Cypress Group, an independent $3.6 billion private equity firm.
Lehman rebuilt its private equity investment team in the mid-1990s and by 1997 LBMB was in position to raise a new fund. The group raised LBMB's second fund, Lehman Brothers Merchant Banking II, with $2.0 billion of investor commitments.
Lehman Brothers Merchant Banking III is a 2004 vintage fund with $1.2 billion of investor commitments and the group's most recent fund, Lehman Brothers Merchant Banking IV, is a 2007 vintage fund with $3.3 billion in total investor commitments. The fund was downsized to $2.6 billion after the spin-out following the Lehman Brothers bankruptcy. Trilantic Partners successfully kept virtually all of its investment professionals.
filed for bankruptcy protection. As part of the liquidation process, Lazard
was appointed to sell certain interests in Lehman Brothers Merchant Banking and its investment funds held by the bank. At the same time Lehman's estate also attempted to sell two other Lehman private investment units, a venture capital investment group and a real-estate private equity group.
At the time of Lehman's bankruptcy, the group was headed by Charles Ayres who joined Lehman in 2003. Previously, Ayres co-founded MidOcean Partners
, which was formed from the private equity assets of Deutsche Bank
, where he had served as North American head of private equity.
Among the bidders rumored in the transaction initially included The Blackstone Group, The Carlyle Group and Lexington Partners
.
In January 2009, Lehman reportedly reached an agreement to sell certain interests in Lehman Brothers Merchant Banking to South African businessman, Johann Rupert
as part of a spinout of the group from the failed bank into an independent private equity firm
. Under the deal, the principals of LBMB would spin out the general partner interest of most recent fund LBMB IV with Rupert's Reinet Investments
purchasing Lehman's limited partnership interest in LBMB IV.
The announcement of the spinout of Lehman Brothers Merchant Banking came just six weeks after the completion of the spinout of Bear Stearns Merchant Banking from JPMorgan Chase to form Irving Place Capital
.
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
investment firm focused on leveraged buyout
Leveraged buyout
A leveraged buyout occurs when an investor, typically financial sponsor, acquires a controlling interest in a company's equity and where a significant percentage of the purchase price is financed through leverage...
and growth capital
Growth capital
Growth capital is a type of private equity investment, most often a minority investment, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a significant acquisition without a change of control of the business.Companies...
investments in middle-market companies across a range of industries in the US and Europe. The firm was formerly known as Lehman Brothers Merchant Banking (LBMB), the buyout arm of Lehman Brothers
Lehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
. In 2009, as part of the bankruptcy of Lehman, the LBMB business was sold to Reinet Investments
Reinet Investments
Reinet Investments S.C.A. is a Luxembourg-based investment vehicle that was demerged from the Swiss luxury goods company Richemont on 20 October 2008...
, an investment firm owned by South African businessman Johann Rupert
Johann Rupert
Johann Peter Rupert is the eldest son of the late South African business tycoon Anton Rupert and his wife Huberte Rupert. He is the chairman of the Swiss-based luxury-goods company Richemont as well as of the South Africa-based company Remgro...
.
The group, which was based in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, was founded in 1986 and is currently investing from a $2.6 billion fund raised prior to the bankruptcy of Lehman. Prior to the bankruptcy of Lehman, LBMB had raised four funds with aggregate commitments of $8 billion. The firm's fourth fund was reduced in size from $3.3 billion to $2.6 billion following Lehman's bankruptcy.
Among the group's most notable investments include: Blount, Inc. , Crosstex Energy , Eagle Rock Energy Partners , Flagstone Reinsurance and SRAM Corporation.
Founding and early history
Private equity in the 1980s
Private equity in the 1980s relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub-industries, leveraged buyouts and venture capital experienced growth along parallel although interrelated tracks.The...
to serve as the private equity arm of Lehman Brothers
Lehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
. LBMB was founded just a year after Lehman's Pete Peterson
Peter George Peterson
Peter G. Peterson is an American businessman, investment banker, fiscal conservative, author, and politician whose most prominent political position was as United States Secretary of Commerce from February 29, 1972, to February 1, 1973 under Richard Nixon. He is most well known currently as...
and Stephen A. Schwarzman
Stephen A. Schwarzman
Stephen Allen Schwarzman is an American businessman and investor and the chairman and co-founder of the Blackstone Group, the private-equity and financial advisory firm.-Early life and education:...
left the bank to found The Blackstone Group and at the same time that similar groups were founded at other investment banks including Goldman Sachs Capital Partners
Goldman Sachs Capital Partners
Goldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally....
, Morgan Stanley Capital Partners and DLJ Merchant Banking Partners
DLJ Merchant Banking Partners
DLJ Merchant Banking Partners is a private equity investment firm focused on leveraged buyout transactions. The firm is currently an affiliate of Credit Suisse and traces its roots to Donaldson, Lufkin & Jenrette, the investment bank acquired by Credit Suisse First Boston in 2000...
.
Following the departure of the Blackstone founders, Lehman restarted its private equity efforts in the late 1980s raising an investment fund with a new team of professionals led by Jim Stern, Jeff Hughes, Jamie Singleton and David Spalding. LBMB raised its first institutional
Institutional investor
Institutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
private equity fund in 1989 with $1.3 billion of capital. Capitalizing on the success of this first fund, in 1994 the four senior managing directors of LBMB left the firm to found The Cypress Group, an independent $3.6 billion private equity firm.
Lehman rebuilt its private equity investment team in the mid-1990s and by 1997 LBMB was in position to raise a new fund. The group raised LBMB's second fund, Lehman Brothers Merchant Banking II, with $2.0 billion of investor commitments.
Lehman Brothers Merchant Banking III is a 2004 vintage fund with $1.2 billion of investor commitments and the group's most recent fund, Lehman Brothers Merchant Banking IV, is a 2007 vintage fund with $3.3 billion in total investor commitments. The fund was downsized to $2.6 billion after the spin-out following the Lehman Brothers bankruptcy. Trilantic Partners successfully kept virtually all of its investment professionals.
| Fund | Vintage Year | Capital Committed |
| Fund IV | 2007 | $2.6 billion |
| Fund III | 2004 | $1.2 billion |
| Fund II | 1997 | $2.0 billion |
| Fund I | 1989 | $1.3 billion |
Lehman Brothers bankruptcy and LBMB spin out
On September 15, 2008, Lehman BrothersLehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
filed for bankruptcy protection. As part of the liquidation process, Lazard
Lazard
Lazard Ltd is the parent company of Lazard Group LLC, a global, independent investment bank with approximately 2,300 employees in 42 cities across 27 countries throughout Europe, North America, Asia, Australia, Central and South America...
was appointed to sell certain interests in Lehman Brothers Merchant Banking and its investment funds held by the bank. At the same time Lehman's estate also attempted to sell two other Lehman private investment units, a venture capital investment group and a real-estate private equity group.
At the time of Lehman's bankruptcy, the group was headed by Charles Ayres who joined Lehman in 2003. Previously, Ayres co-founded MidOcean Partners
MidOcean Partners
MidOcean Partners is a private equity firm specializing in leveraged buyouts, recapitalizations and growth capital investments in middle-market companies...
, which was formed from the private equity assets of Deutsche Bank
Deutsche Bank
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
, where he had served as North American head of private equity.
Among the bidders rumored in the transaction initially included The Blackstone Group, The Carlyle Group and Lexington Partners
Lexington Partners
Lexington Partners, is a leading independent manager of secondary private equity and co-Investment funds, founded in 1994. Lexington Partners manages approximately $18 billion of which $3.8 billion was committed to the firm's sixth and latest fund .Lexington was founded by former investment...
.
In January 2009, Lehman reportedly reached an agreement to sell certain interests in Lehman Brothers Merchant Banking to South African businessman, Johann Rupert
Johann Rupert
Johann Peter Rupert is the eldest son of the late South African business tycoon Anton Rupert and his wife Huberte Rupert. He is the chairman of the Swiss-based luxury-goods company Richemont as well as of the South Africa-based company Remgro...
as part of a spinout of the group from the failed bank into an independent private equity firm
Private equity firm
A private equity firm is an investment manager that makes investments in the private equity of operating companies through a variety of loosely affiliated investment strategies including leveraged buyout, venture capital, and growth capital...
. Under the deal, the principals of LBMB would spin out the general partner interest of most recent fund LBMB IV with Rupert's Reinet Investments
Reinet Investments
Reinet Investments S.C.A. is a Luxembourg-based investment vehicle that was demerged from the Swiss luxury goods company Richemont on 20 October 2008...
purchasing Lehman's limited partnership interest in LBMB IV.
The announcement of the spinout of Lehman Brothers Merchant Banking came just six weeks after the completion of the spinout of Bear Stearns Merchant Banking from JPMorgan Chase to form Irving Place Capital
Irving Place Capital
Irving Place Capital, formerly known as Bear Stearns Merchant Banking , is a private equity firm focused on leveraged buyout and growth capital investments in middle-market companies across a range of industries....
.
External links
- Trilantic Capital Partners (company website)