The management bid was selected as the winner in a Bankruptcy Court auction, topping a previous bid from the private equity firms of Bain Capital and Hellman & Friedman.
As part of the transaction, a new, independent investment management company to be called Neuberger Investment Management will be created comprising businesses that managed approximately $160 billion of assets as of November 30, 2008. Management will control 51% of the new company with Lehman Brothers Holdings Inc. retaining a 49% stake. Final Bankruptcy Court approval is scheduled for later this month and closing is expected in the first quarter of 2009, according to the announcement.
The Management bid was selected as the highest offer because it offered greater value and certainty of closing, said Jim Fogarty, a managing director with Alvarez & Marsal and chief operating officer of Lehman Brothers Holdings, according to the announcement. The professional services firm of Alvarez & Marsal has been overseeing Lehman Brothers Holdings and working to maximize value for creditors.
The Management acquisition includes the businesses of:
- Neuberger Berman (primarily equities products and services, mutual funds),
- Lehman Brothers Asset Management (fixed income, commodities, and quantitative portfolio management), and
- Lehman Brothers’ private funds investment group, which includes the fund-of-funds businesses (both hedge fund and private equity), secondary private equity, and co-investment.
Several startup private equity businesses, including infrastructure and mezzanine debt, are also included. George Walker, global head of investment management for Lehman Brothers, will be chief executive of Neuberger Investment Management, and Joe Amato will continue to lead Neuberger Berman, its largest operating unit.