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INDIA BUSINESS WORLD - October 1st - October 15th - 2008
PE COS BAIN CAPITAL PARTNERS AND HELLMAN & FRIEDMAN AGREE TO BUY LEHMAN ASSET MANAGEMENT FIRM NEUBERGER
TWO of the world’s leading private equity firms — Bain Capital Partners and Hellman & Friedman — has agreed to acquire Lehman Brothers’ 69-year-old asset management firm Neuberger Berman for $2.15 billion.
The acquisition includes Neuberger Berman and the fixed income and certain alternative asset management businesses of Lehman Brothers Investment Management Division, in partnership with portfolio managers, the management team and senior professionals.
As part of the transaction, a new, independent investment management company would be created comprising businesses that managed more than $230 billion of assets as of August 31, 2008, an announcement said.
Lehman Brothers Global Head of investment management George Walker will be chief executive of Neuberger Investment Management and Joe Amato would continue to lead Neuberger Berman.
“We are excited and energised about what this means for our clients and our employees,” George Walker said in a statement, adding, “I can’t think of two better partners than Bain Capital and Hellman & Friedman, with proven track records of creating value in financial services, and asset management in particular.”
Michael Odrich, head of private equity, and Tony Tutrone, head of the private funds investment group, will also join the company.
The transaction, however, does not include Lehman Brothers’ major direct private equity businesses such as merchant banking, real estate, venture capital; certain hedge funds. It also does not include the minority stakes in hedge funds held by Lehman Brothers Holdings, for which Holdings continues to assess strategic alternatives.
Bain Capital Partners and Hellman & Friedman have committed to an all-equity transaction in which they will be equal partners in the new entity. Portfolio managers and management will also own a significant stake and will increase their ownership over time through an ongoing, equity-based compensation programme.
“We are pleased to join our partners at Hellman & Friedman and the portfolio managers and management team in purchasing this fine investment management business with proven and experienced talent, providing important stability for clients and employees,” Bain Capital managing director Andrew Balson said.
The transaction is expected to be completed by early 2009 and is subject to satisfaction of certain closing conditions, including the Lehman Brothers Holdings Bankruptcy Court approval.
Founded in 1939, Neuberger Berman has more than 25 experienced portfolio teams in its Private Asset Management platform. The firm offers separately managed accounts, mutual funds and advice to high net worth and institutional investors.
Separately, the North and South American operations of Lehman Brothers Private Investment Management, an institutional and high net worth brokerage business, were sold to Barclays Capital as part of that company’s purchase of the Capital Markets business of Lehman Brothers.
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