| Type | Private |
|---|---|
| Industry | Private equity |
| Predecessor | Lehman Brothers Merchant Banking |
| Founded | 1986 |
| Headquarters | New York, New York, United States |
| Key people | Charles Ayres[1] |
| Products | Leveraged buyout, Growth capital |
| Total assets | $2.6 billion |
| Employees | 35+ |
| Parent | Reinet Investments Lehman Brothers (prior) |
| Website | www.trilanticpartners.com |
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. (NYSE: BLT), Crosstex Energy (NASDAQ: XTEX), Eagle Rock Energy Partners (NASDAQ: EROC), Flagstone Reinsurance (NYSE: FSR) and SRAM Corporation.
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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.
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Early history |
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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.[2]
| 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 |
On September 15, 2008, Lehman Brothers 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.[3] 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.[4]
At the time of Lehman's bankruptcy, the group was headed by Charles Ayres who joined Lehman in 2003.[1] 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.[3]
Among the bidders rumored in the transaction initially included The Blackstone Group, The Carlyle Group and Lexington Partners.[5]
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.[6] 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.[4][7]
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.
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