Bond Venture Reunites Drexel Players

Jay Bloom and Dean Kehler of Trimaran Capital Partners reportedly joined forces with Nelson Peltz's Trian Partners in a venture focused on investing in a variety of credit instruments.

All three were top dealmakers at Drexel Burnham Lambert in the 1980s. According to The Wall Street Journal, their reunion now reflects the men's shared belief that credit markets are close to bottoming. "It's 1990 all over again, but it's so much bigger and so much broader," Bloom told the Journal, referring to the junk-bond bust that followed Drexel's collapse.

After Drexel, Bloom and Kehler started a junk-bond boutique called Argosy Group, which was sold in 1995. In that year they launched Trimaran, which manages middle-market private equity funds and high-yield bond funds. The PE arm, Trimaran Fund Management, has invested a total of $1.6 billion of equity in 59 portfolio companies in transactions totaling more than $10 billion, according to Trimaran's Web site. The bond unit, Trimaran Advisors, has approximately $1.5 billion currently under management.

Peltz and his vehicle, Trian, are more widely known. The Journal story says Trian has several billion dollars to deploy in credit investments including corporate bonds, bank loans or the outright purchase of ailing companies through their debt.

"Mr. Peltz's new focus on bonds is a telling sign of the market," the newspaper adds. In the past three years he's pursued an activist hedge-fund style, taking equity positions and agitating for changes or board seats at companies. But with bond prices at historic lows lately, a Trian executive told the Journal, "At the risk of hyperbole, this might be a once-in-lifetime opportunity."