Byron Trott to Start Merchant-Banking Fund

Warren Buffet’s adviser leaves Goldman Sachs

Goldman Sachs

The man responsible for advising one of the richest men in the United States is leaving his job to start his own merchant-banking fund. Byron Trott is financial adviser to Warren Buffett. He has worked at Goldman Sachs for 27 years.

More about Trott

Trott lives in Chicago, and he is a vice president of investment banking. He plans to start a merchant-banking fund that will invest in and advise private companies, specifically those controlled by families or entrepreneurs.

Starting a trend?

Managing partner at recruitment company Higdon Partners LLC Henry Higdon believes the banking industry will see a lot of defection as a result of the regulations imposed on banks that get cash advances from federal bailout funds.

“Nobody’s having fun at these banks if they’ve taken a nickel of government capital,” said Higdon, who is based in New York. “The place to be over the next two years is going to be private companies. The guys with the confidence, who are true entrepreneurs, are going to start their own companies.”

Trouble at Goldman Sachs

Trott is not the first big-time executive to leave Goldman Sachs this year. The bank’s co-president, Jon Winkelried, resigned last month. A story from February says he retired with the desire to spend more time with his family. He is 49.

Goldman Sachs was the biggest and most-profitable securities firm until it converted to a bank in September, a week after Lehman Brothers Holdings Inc. went bankrupt. Goldman Sachs was among the first nine banks that received capital injections from the U.S. Treasury in October, receiving $10 billion. The government has since enacted laws that restrict compensation at banks that have taken government money, according to Bloomberg.com.

Trott’s beginning and end

Trott started working for Goldman Sachs in 1982. He recently helped line up a $5 billion capital injection from Berkshire Hathaway Inc., Buffett’s insurance company. Buffett says he will invest in Trott’s new firm.