Buffett's banker on his own

(breakingviews.com) -- In a business like investment banking, losing people is bad news. So when one of Goldman Sachs' most prolific rainmakers is leaving to hang his own shingle, it is hard to view it as anything but a blow.

But while the departure of Byron Trott - otherwise known as Warren Buffett's banker - may look bad, the Wall Street firm is likely to remain in the billionaire's good graces.

True, Trott is about the only banker to have earned Buffett's praise since the Berkshire Hathaway (BRK.A) boss narrowly escaped an investment in Salomon Brothers two decades ago.

Trott didn't just earn the Sage of Omaha's business - on many occasions he received a shout-out. In Berkshire's 2007 annual report, Buffett called him "the rare investment banker who puts himself in his client's shoes."

So the optics - to use the argot of the banker - are not especially pretty for Goldman (GS, Fortune 500). Not least because Trott will now be doling out the advice Buffett praised so publicly over the years from his new shop, BDT Capital Partners.

He also intends to raise some $2 billion - including from Buffett - to invest in family-owned companies. These activities would seem to put him in competition with his long-time employer.

But Buffett has ample reason to keep Goldman near the top of his call list. While Trott may have gracefully managed the firm's relationship with Buffett, the value of Goldman's pipeline of opportunities is priceless.

In his 2003 annual letter, Buffett praised Trott for calling his attention to Wal-Mart's (WMT, Fortune 500) McLane subsidiary, which Berkshire bought for $1.5 billion. Access to information like Wal-Mart's seeking a buyer for McLane doesn't come easily when you are a one-man band.

And even if Trott siphons off a little business from the Buffett-Goldman nexus, there's a far more obvious motivation for Buffett to keep Goldman busy.

Last September Buffett bought $5 billion of Goldman's preferred stock, and warrants to buy another $5 billion of common stock at a strike price of $115 a share. So any business he shifts through Goldman could directly help Berkshire's own bottom line.

Trott may be leaving Goldman, but it's fair to say he left it with a deal that could keep on giving.