Lehman Asks P.E. Firms About Asset Mgmt. Unit

Aug 20 2008 | 9:09am ET

Lehman Brothers is gauging the interest of a number of high-profile private equity firms in purchasing its asset management division, according to reports.

The New York investment bank sent memoranda of understanding to Apollo Management, the Blackstone Group, the Carlyle Group, Kohlberg Kravis Roberts and J.C. Flowers & Co., among other potential buyers. Lehman said it would accept bids for all of part of the asset management unit, which includes hedge funds and private equity funds, in addition to mutual funds.

The memoranda did not place a value on the asset management division, which manages $277 billion, as it seeks to determine just how much capital it could raise from a sale. Previous estimates have suggested Lehman could get as much as $13 billion for its Neuberger Berman unit alone.

Lehman has been battered by the credit crisis, and upcoming writedowns of its mortgage portfolio may erase all of its earnings.

The bank’s minority stakes in hedge funds D.E. Shaw Group and Ospraie Asset Management are not thought to be for sale.

At least one of the p.e. houses contacted by Lehman, Blackstone, has indicated that it is not interested in buying the whole of the asset management group, The New York Times reports.


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