Trimaran Capital Partners is a middle-market

private equity firm A private equity firm is an investment management company that provides financial backing and makes investments in the private equity of startup or operating companies through a variety of loosely affiliated investment strategies including lev ...

formerly affiliated with

CIBC World Markets CIBC World Markets Inc. is the investment banking subsidiary of the Canadian Imperial Bank of Commerce. The firm operates as an investment bank both in the domestic and international equity and debt capital markets. The firm provides a variety ...

. Trimaran is headquartered in

New York City New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the Un ...

and founded by former investment bankers from Drexel Burnham Lambert. Trimaran's predecessors were early investors in telecom and Internet businesses, most notably backing

Global Crossing Global Crossing was a telecommunications company that provided computer networking services and operated a tier 1 carrier. It maintained a large backbone network and offered peering, virtual private networks, leased lines, audio and video con ...

in 1997. Trimaran also led the first

leveraged buyout A leveraged buyout (LBO) is one company's acquisition of another company using a significant amount of borrowed money ( leverage) to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loa ...

of an integrated electric utility. Since 1995, Trimaran and its successor entities have invested approximately $1.6 billion of equity in fifty-nine companies through transactions totaling more than $10 billion in total value. In addition, Trimaran's debt business has managed approximately $1.5 billion of

leveraged loan In finance, leverage (or gearing in the United Kingdom and Australia) is any technique involving borrowing funds to buy things, hoping that future profits will be many times more than the cost of borrowing. This technique is named after a lever ...

s across four collateralized loan obligation vehicles. Since 2006, one of its co-founders, Andrew Heyer, lead a spinout of a portion of its team to form

Mistral Equity Partners Trimaran Capital Partners is a middle-market private equity firm formerly affiliated with CIBC World Markets. Trimaran is headquartered in New York City and founded by former investment bankers from Drexel Burnham Lambert. Trimaran's predecess ...

In 2008, the two remaining managing partners entered into a venture with

Nelson Peltz Nelson Peltz (born June 24, 1942) is an American billionaire businessman and investor. He is a founding partner, together with Peter W. May and Edward P. Garden, of Trian Fund Management, an alternative investment management fund based in New Yor ...

’s Trian to create a new debt-focused business development company. The firm is named for the trimaran, a multi-hulled boat consisting of a main hull and two smaller outrigger hulls. The firm's principals had used nautical terms to describe their predecessor entities including argosy, a merchant ship, or a fleet of such ships and

caravel The caravel (Portuguese: , ) is a small maneuverable sailing ship used in the 15th century by the Portuguese to explore along the West African coast and into the Atlantic Ocean. The lateen sails gave it speed and the capacity for sailing win ...

le, a small, highly maneuverable, two- or three-masted ship.

History

Trimaran Capital Partners was founded in 2000 by former Drexel Burnham Lambert and

investment bankers Jay Bloom, Andrew Heyer, and Dean Kehler. The firm traces its roots back to the 1995 creation of the CIBC Argosy Merchant funds, a series of merchant banking investment funds managed on behalf of

CIBC The Canadian Imperial Bank of Commerce (CIBC; french: Banque canadienne impériale de commerce) is a Canadian multinational banking and financial services corporation headquartered at CIBC Square in the Financial District of Toronto, Ontario. ...

, and before that to the 1990 founding of the boutique investment banking firm The Argosy Group.

The Argosy Group

The Argosy Group was a New York-based boutique investment bank founded in February 1990, and is Trimaran's earliest predecessor. Founded as a 9-person advisory firm by Bloom, Heyer, and Kehler, Argosy was one of several private equities and investment banking firms to spring up in the wake of the collapse of Drexel Burnham Lambert. Before Drexel, the three bankers had all worked together at

Shearson Lehman Brothers Shearson was the name of a series of investment banking and retail brokerage firms from 1902 until 1994, named for Edward ShearsonLehman Brothers Kuhn Loeb and were joined by Heyer when Lehman was acquired by Shearson/American Express. The Argosy team had been involved in many of the most prominent high yield financings of the preceding two decades, for companies including RJR Nabisco,

Beatrice Foods Beatrice Foods Company was a major American food processing company founded in 1894. In 1987, its international food operations were sold to Reginald Lewis, a corporate attorney, creating TLC Beatrice International, after which the majority of ...

, and Storer Communications. The Argosy Group focused on debt underwriting, private placements, sales and trading, proprietary special situation investing, and restructuring advisory assignments for highly leveraged companies. Argosy created a niche raising high yield debt.

Acquisition by CIBC

In April 1995, CIBC's investment banking subsidiary, then known as CIBC Wood Gundy announced the acquisition of The Argosy Group,Canadian Imperial Bank of Commerce Company History
Funding Universe The acquisition of Argosy marked an aggressive push by CIBC into the U.S. investment banking business. Prior to that point, CIBC had never done a

junk bond In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events ...

deal. Argosy's three major principals had worked on some of the biggest junk bond deals of the 1980s while at Drexel Burnham Lambert. The 52 Argosy employees that CIBC acquired would constitute the core of what would become CIBC's High Yield Group and the CIBC Argosy Merchant Banking funds that were responsible for, among other things, the $2 billion windfall that CIBC would earn from its early investments in

. The Argosy principals also managed two

collateralized debt obligation A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS).Le ...

vehicles known as Caravelle Funds I and II. With the acquisition of Argosy in 1995 and Oppenheimer & Co. in 1997, the center of gravity of CIBC's investment banking operations began to shift toward the United States. CIBC's High Yield Group began to develop a reputation for financing complex leveraged buyout transactions and worked closely with several of the leading private equity firms. CIBC provided financing for many of the leading private equity firms of this period including:

Apollo Management Apollo Global Management, Inc. is an American global private-equity firm. It provides investment management and invests in credit, private equity, and real assets. As of March 31, 2022, the company had $512 billion of assets under management, ...

Hicks Muse HM Capital Partners was a private equity firm in the United States that specialized in leveraged buyouts. The firm was previously known as Hicks, Muse, Tate & Furst. It was founded in 1989 by Tom Hicks and John Muse as Hicks, Muse & Co. and was ...

, Kohlberg Kravis Roberts & Co.,

Thomas H. Lee Partners Thomas H. Lee Partners, L.P. is an American private equity firm based in Boston investing in middle market growth companies across financial technology and services, healthcare and technology & business solutions. History Founded in 1974 by ...

, and

Willis Stein & Partners Willis Stein & Partners is a private equity firm focused on leveraged buyout transactions for middle-market companies. The firm's most notable investments have included Ziff Davis, Roundy's, Jays Foods, Lincoln Snacks Company and Petersen Pub ...

. Bloom, Heyer and Kehler took on increasing responsibilities within CIBC World Markets. Ultimately, as Vice Chairmen of the bank and co-heads of Leveraged Finance, the three Argosy founders had responsibilities for leveraged loan and high-yield sales, trading and research, debt private placements, restructuring advisory and financial sponsor coverage.CIBC World Markets: The Leveraged Finance Group
(Company Website). Archived Dec. 6, 2000. Accessed August 27, 2010 They were also responsible for the creation and management of multiple special situations investment funds and

funds, and the creation of a major leveraged finance business in the U.K. In the aggregate, these businesses had several hundred employees in the United States, Canada and the U.K.

Investment in Global Crossing (1997–1999)

In 1997, the CIBC Argosy Merchant funds backed

Gary Winnick Gary Winnick is an American financier best known for founding and being Chairman of Global Crossing between 1997 and 2002, when it declared bankruptcy. As of 2015, he was Chairman and Chief Executive Officer of Winnick & Company, a Los Ang ...

and his telecom venture,

, which embarked on a project to build optical fiber cable connections under the ocean between Europe and North America. Bloom, Heyer and Kehler, the heads of the CIBC Argosy Merchant funds and all former Drexel bankers, were former associates of Winnick from his days in the 1980s as a salesman at Drexel Burnham Lambert under

Michael Milken Michael Robert Milken (born July 4, 1946) is an American financier. He is known for his role in the development of the market for high-yield bonds ("junk bonds"), and his conviction and sentence following a guilty plea on felony charges for vio ...

. They were also instrumental in providing Global Crossing with $35 million in equity financing before the company went public. CIBC would ultimately realize a gain estimated to be $2 billion from its relatively small equity investment in Global Crossing, making it one of the most profitable investments by a financial institution in the 1990s. The investment is also thought to have personally generated millions of dollars for Bloom, Heyer and Kehler. CIBC's investment in Global Crossing provided a considerable boost for its investment banking operations in the U.S. and for Bloom, Heyer and Kehler. In fact, CIBC's gain on its investment in Global Crossing would represent more than 20% of the bank's profits in 2000.Bank Works To Improve Its Image In Canada
New York Times, February 27, 2004 Trimaran was founded in 2000, effectively on the back of the success of the Global Crossing investment. In April 2001, Trimaran closed on a $1 billion fund with capital provided primarily by CIBC.
Business Wire, April 11, 2001

(Accessed August 19, 2010)

Spinout from CIBC World Markets (2000–2002)

The investment banking operations of CIBC World Markets reached their peak in 1999 and 2000, when the bank cracked the top ten of U.S. issuers of high yield bonds and the top twenty in mergers and acquisitions advisory. From 1995 through 2000, the High Yield Group at CIBC World Markets had grown to more than 120 and had raised more than $80 billion of high yield debt. Following the crash of the

dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Compo ...

and the shutdown of the high yield markets in late 2000, CIBC World Markets began to suffer a series of setbacks. In July 2001, the ''Wall Street Journal'' profiled CIBC World Markets, chronicling the rapid decline of the bank from the peaks of Wall Street's league table rankings.CIBC World Markets Trips in Big Leagues
" The Wall Street Journal, August 3, 2001 (Accessed August 19, 2010) At the same time, the High Yield Group was restructured with the original Argosy Group founders focusing their responsibilities on their new Trimaran Capital Partners fund and the older CIBC Argosy Merchant funds. Bloom, Heyer and Kehler were succeeded by managing directors Edward Levy and Bruce Spohler, who had worked previously at Argosy and Drexel, together with Bill Phoenix.CIBC World Markets Appoints New Vice-Chairmen
Business Wire, June 18, 2001 (Accessed August 19, 2010) By 2002, as a result of these developments, the CIBC implemented a strategy to reallocate resources and capital away from the riskier CIBC World Markets division in favor of its retail operations. As part of this reallocation, and in an effort to reduce conflicts between the bank's principal investments and its financial sponsor clients, the Trimaran operations would subsequently spinout completely from CIBC World Markets. Trimaran Capital Partners became independent of CIBC in February 2006

Investments (2002–2005)

Although Trimaran had made some investments in telecom and internet startups in 2000 and had also made investments in companies such as Iasis Healthcare and

Village Voice Media Village Voice Media or VVM is a newspaper company. It began in 1970 as a weekly alternative newspaper in Phoenix. The company, founded by Michael Lacey (editor) and Jim Larkin (publisher), was then known as New Times Inc. (NTI) and the public ...

, the bulk of its capital from its $1 billion 2001-vintage private equity fund was uninvested after its first year and a half. From the end of 2002 through mid-2005, Trimaran actively pursued new investments. In December 2002, Trimaran partnered with Kohlberg Kravis Roberts & Co. to purchase the transmission business subsidiary,

ITC Transmission ITC Transmission was founded in 1999 as International Transmission Co., a subsidiary of Detroit Edison (since renamed DTE Energy Electric Company, itself a subsidiary of DTE Energy), charged in the ownership, operation and maintenance of Detroit ...

, from DTE Energy. In 2003, Trimaran completed a number of

s including Reddy Ice (with

Bear Stearns Merchant Banking Irving Place Capital, formerly known as Bear Stearns Merchant Banking (BSMB), is an American private equity firm focused on leveraged buyout and growth capital investments in middle-market companies in the industrial, packaging, consumer and reta ...

), Norcraft (with Saunders Karp & Megrue) Trimaran made a series of investments in 2004 including: jewellery retailer Fortunoff, specialty apparel retailer Urban Brands (

Ashley Stewart Ashley Stewart is an American plus size women's clothing company and lifestyle brand, which was founded in 1991. The name Ashley Stewart was inspired by Laura Ashley and Martha Stewart, who the company saw as icons of upscale Americana. The S ...

clothing) and auto parts manufacturer Accuride Corporation. In 2005, Trimaran would add Charlie Brown Steakhouse, which would later acquire Bugaboo Creek Steak House in 2007. Trimaran would also make investments in Jefferson National and Broadview Networks among others.

Successor entities

Trimaran initially attempted to raise a third, $1.25 billion fund in 2004, but existing limited partners expressed dissatisfaction with the fact that the firm had not fully invested its existing fund and had yet to produce sufficient realizations to merit a new commitment. Although Trimaran is still in operation managing its existing investment funds, the key professionals in the firm have embarked on a number of different ventures.

Mistral Equity Partners spinout (2007)

Following the failure of Trimaran to raise its third fund, in March 2007, Andrew Heyer, one of the three founders of Trimaran, left the firm to launch a new buyout firm. Mistral Equity Partners was founded with a team from Trimaran to make investments in the consumer and retail industries.Mistral spins out of Trimaran
Private Equity Week, March 05, 2007 (Accessed August 19, 2010)Mistral Forms As Trimaran Rebuilds
Reuters Buyouts, March 4, 2007 (Accessed August 19, 2010) Mistral successfully raised an approximately $300 million fund Trimaran Capital Partners III has a preliminary target range of $700 million to $1 billion. Trimaran plans to raise an interim $300 million to make deals happen while beating the bushes for money for the larger fund. Fundraising for both is slated to start later this year, according to a source close to Trimaran. Without Heyer, Trimaran was never successfully raised. Mistral formed a partnership with the Schottenstein family, which has acquired well-known retailers such as

American Eagle Outfitters American Eagle Outfitters, Inc., also known as American Eagle, is an American lifestyle, clothing, and accessories retailer headquartered at SouthSide Works in Pittsburgh, Pennsylvania. It was founded in 1977 by brothers Jerry and Mark Silverma ...

DSW Shoe Warehouse Designer Brands Inc. is an American company that sells designer and name brand shoes and fashion accessories. It owns the Designer Shoe Warehouse (DSW) store chain, and operates over 500 stores in the United States and an e-commerce website. T ...

and

Filene's Basement Filene's Basement, also called The Basement, was a Massachusetts-based chain of department stores which was owned by Retail Ventures, Inc. until April 2009 when it was sold to Syms. The oldest off-price retailer in the United States, Filene's ...

. The family made an equity commitment to the new Mistral fund, and

Jay Schottenstein Jay Schottenstein (born 1954) is an entrepreneur from Columbus, Ohio. He is the chairman and CEO of Schottenstein Stores Corporation, American Eagle Outfitters, and American Signature. He is the Executive Chairman of Designer Brands. Early life ...

assumed a part-time advisory role with the firm.

Joint Venture with Nelson Peltz / Trian Partners (2008)

Trimaran Partners, Jay Bloom and Dean Kehler, co-founders and managing partners of the private equity firm, have reportedly struck out on a venture with the Nelson Peltz-led hedge fund Trian Partners, investing in distressed corporate bonds, bank loans, and possible loan-to-own opportunities. The move, reuniting a former team from Drexel Burnham Lambert, does not signal an end to Trimaran, which will continue on as an independent entity. Bloom and Kehler had founded the PE firm in 1995. The jump back to corporate credit is not big leap for Bloom and Kehler. At Trimaran, the pair also oversaw Trimaran Advisors, which invests in below investment-grade corporate debt. David Millison, also a Drexel alum, had managed those funds for Trimaran as the chief investment officer. He is not expected to be joining Bloom and Kehler in the new venture. Bloom and Kehler have been paired off for much of their respective careers. Prior to Trimaran, both Bloom and Kehler had served as co-heads of the CIBC Argosy Merchant Banking Funds, the PE arm of CIBC World Markets.Trian nabs pair of Drexel vets to grow credit business
. The Deal, December 18, 2008 (Accessed September 27, 2009)Peltz Brings the Old Band From Drexel Back Together
Wall Street Journal, December 18, 2008 (Accessed August 19, 2010)
Mergers & Acquisitions, December 18, 2008 (Accessed August 19, 2010)

References

{{Private equity and venture capital Private equity firms of the United States Canadian Imperial Bank of Commerce Drexel Burnham Lambert Financial services companies established in 1990