BDT & MSD soon to close latest long-dated fund after raising $13bn

BDT & MSD Partners, formed this year in a high-profile merger, will this month close a fourth flagship private capital offering, sources told Buyouts.

BDT Capital Partners Fund 4 has so far amassed more than $13 billion, according to Form D documents filed last week. The vehicle’s target is not known.

With $13 billion in the bank, Fund 4 is already the largest pool in a flagship series that began in 2010. It is 43 percent bigger than Fund 3, wrapped up in 2020 at $9.1 billion.

The news comes several months after BDT & Company, launched in 2009 by former Goldman Sachs investment banker Byron Trott, combined with MSD Partners, which invests on behalf of the family of Dell Technologies founder Michael Dell and others. The deal created BDT & MSD Partners, a family and founder-oriented merchant bank with an advisory and investment platform.

The objective behind the merger was not to be “the biggest firm,” sources told PE Hub last October.

Instead, the goal was to set up a single manager of three core strategies, including a private capital approach that builds on BDT’s focus on long-duration investing.

BDT & MSD’s flagship strategy makes primarily minority investments in family and founder-led companies, with deals typically done in North America and Europe and across a range of sectors. Significantly, hold periods are beyond the traditional private equity horizon of three to five years, with prior BDT funds investing over eight to 13 years, sources said.

Further details of the strategy are not known, though some hints are provided in recent deals.

In the summer, BDT & MSD announced making a minority investment in IMA Group, a designer and manufacturer of automatic packaging machines, in partnership with the Vacchi family. The stake was acquired from BC Partners.

Earlier this year, BDT & MSD invested in Silver Lake’s take-private acquisition of Qualtrics, an experience management software provider. The deal, valued at $12.5 billion, included an investment from DFO Management, Dell’s family office. In addition, the firm invested $125 million in National Amusements, a movie theater operator majority owned by the Redstone family.

BDT & MSD, which also features credit and real estate strategies, is led by co-CEOs Trott and Gregg Lemkau, the former head of MSD. Dan Jester and San Orr serve as co-presidents. The firm has head offices in Chicago and New York.

BDT was an early mover in long-dated investing. Others in the space are Altas Partners, BlackRock, Blackstone, Brookfield Asset Management, Carlyle, Cove Hill Partners, CVC, EQT and KKR. KKR is raising KKR Core Platform II, which if closed at its $16 billion target would be the largest such fund on record.

(This story was updated to clarify BDT & MSD’s mandate following the 2023 combination.)