Lehman Sheds Minority Hedge Fund Stake

Oct 9 2008 | 12:21pm ET

Bankrupt Lehman Brothers Holdings has reportedly agreed to sell its 45% stake in hedge fund R3 Capital Partners for $250 million in cash and a $250 million investment in another fund managed by R3.

Lehman acquired the stake in May for roughly $1 billion investment, according to court documents filed in U.S. Bankruptcy Court in Manhattan. Under the terms of the agreement, the buyer will pay $125 million in cash at closing and another $125 million as a promissory note. R3 Capital is run by Richard Rieder, a former head of global principal strategies at Lehman.

Lehman owned the non-voting, minority ownership stakes in the master fund, general partner, special limited partner and management company of R3 Capital Partners, which invests primarily in corporate bonds and loans.

In the second quarter, Lehman sold assets and transferred derivative risk of about $4.5 billion at fair value to R3. The assets sold were primarily corporate bonds and loans.

Lehman still owns minority stakes in several other hedge funds, including GLG Partners.

RELATED ARTICLES:

Ex-Lehman Trader Launches Hedge Fund


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of