Bloomberg News

Ex-Deutsche Bank Commodity Head Joined by Team at TrailStone (1)

May 21, 2013

Former Deutsche Bank AG executives led by commodities chief David Silbert started an energy and metals company backed by private-equity energy firm Riverstone Holdings LLC that may have as many as 125 staff in three years.

Partners in TrailStone include Bill Gebhardt, Deutsche bank’s former head of European power and gas, Troy Martin, former chief operating officer for commodities, Raymond Key, head of metals trading, and John Redpath, head of oil and agriculture trading, Silbert, who is a managing partner, said in a phone interview today. They will have the same roles at TrailStone, and Key will be in charge of metals and mining, he said.

“The time is perfect,” Silbert said. “We are going through a short cyclical downturn in commodities. The demand for commodities is growing and will continue to grow. The banks won’t play the same role they played traditionally.”

Banks are overhauling their raw materials units as regulators push lenders to raise capital requirements and curb proprietary trading. Commodities revenue at the 10 largest banks dropped 54 percent in the first quarter from a year earlier amid lower client activity and the changes to lenders’ units, analytics company Coalition said May 15.

New York-based Riverstone committed $500 million to TrailStone and is the majority investor, said Silbert. The company plans to raise as much as $1 billion, he said. TrailStone has offices in London and Austin, Texas, and will open an office in Sydney, where Key will work, Silbert said. It will have 35 to 50 front-office staff in 12 to 18 months, and between 100 and 125 staff in three years, he said.

Miners, Power

TrailStone will buy stakes in miners and power and gas companies or provide financing for offtake agreements, Silbert said. Junior mining companies are “really struggling to find capital” and the company will focus on precious metals and copper, he said. It will focus on North America and Europe in power and gas, and may get involved in agriculture at a later date, he said.

Banks including Citigroup Inc. and Deutsche Bank have called an end to the so-called commodities supercycle that saw prices rise almost fourfold in the previous decade. The Standard & Poor’s GSCI Index of 24 raw materials fell 2.2 percent this year.

The “cyclical downturn” may last 12 to 18 months and assets are cheap, making it a perfect time to buy, Silbert said. TrailStone will “capitalize on cheap assets, on good physical logistics and being able to provide capital to people who need it,” he said.

Silbert’s departure was reported in December and Deutsche Bank named Louise Kitchen and Richard Jefferson co-heads of commodities in January. TrailStone is registered in London and was incorporated May 2, data from the U.K.’s Companies House show. Riverstone declined to comment on the investment. Deutsche Bank spokesman Nick Bone declined to comment on departures.

To contact the reporter on this story: Maria Kolesnikova in London at

To contact the editor responsible for this story: Claudia Carpenter at

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