AMG Near Deal For Lehman’s Piece Of D.E. Shaw

Jun 16 2014 | 9:46am ET

The Lehman Brothers estate has at last found a buyer for its 20% stake in D.E. Shaw Group.

The only one of six firms invited to bid on the passive ownership interest in the $32 billion quantitative hedge fund to show interest in it, Affiliated Managers Group, has offered more than $500 million for it, The Wall Street Journal reports. The Lehman estate, which has been shopping the stake for more than six months, has accepted the offer in principle, although the deal could still fall apart.

Should the sale be finalized—and the completion isn’t imminent and requires the approval of D.E. Shaw founder David Shaw—the price would be at the low end of what the estate hoped to fetch for the stake. Lehman paid about $800 million for it in 2007, about a year before it collapsed.

The terms of that 2007 agreement were a sticking point for several of the other firms invited to bid, among them private-equity firms Blackstone Group, Foundation Capital Partners and Kohlberg Kravis Roberts: Lehman received its share of the firm’s profits but had no voice in the firm’s management, nor a seat on its board. And the value of hedge-fund stakes has fallen precipitously since their heyday before the financial crisis.

AMG’s bid would value New York-based D.E. Shaw at more than $2 billion.

Prides Crossing, Mass.-based AMG invests in asset managers and owns stakes in a number of prominent hedge funds, among them AQR Capital Management, BlueMountain Capital Management and ValueAct Capital Management.


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