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

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note