The Merchants Group Ltd. was founded in 1974 in San Francisco by Robert H. Chappell, a former Morgan Stanley partner. It was the first firm to manage funds for Asian investors in California. Investors included the Industrial Bank of Japan, Dai Nippon, Central Glass, Toyo Soda, and the Hattori (Seiko) and Ishizaka (Toshiba) families. Other investment clients included the National Coal Board, Candover Investments Plc of the United Kingdom, and Bayerische Motorenwerke (BMW) of Germany.
In 1997 Robert Chappell and Edward Holl combined their interests and formed Merchants Partners. Additional partners who joined the firm at that time included the former head of JP Morgan M&A John Zinn, former Vice Chairman Bank of America Alvin Rice and former President of DHL Worldwide Express Joe Waechter. Headquartered in downtown San Francisco, Merchants Partners was at the center of the early development of the Internet. The company made numerous investments in dot-com start-ups, many of which failed and some which were spectacularly successful.
In 1999, again backed by Japanese investors, Merchants Partners made several investments related to internet and industrial companies. These included AOL’s top digital property, an internet advertising technology company among the first to do “pop-up” ads, and industrial companies engaged in linear motors, air pressure pumps and packaging logistics. Following the Dot-Com crash of 2000-2002, the company successfully invested in “fallen angels,” including 24/7 Real Media and Photoworks. Merchants Partners successfully sold all investments by 2007.
The Great Financial Crisis of 2008-2009 made most capital activities in the U.S. unattractive. Merchants Partners turned its attention to China and the international maritime ports industry, resulting in several successful transactions by 2010. In 2014 and 2015 the company started developing projects related to the maritime shipping industry, including global trade analytics, satellite tracking of ships, and securities trading.