Neuberger Berman Scooped Up by Private Equity Firms

September 29, 2008 ( - Private equity firms Bain Capital Partners, LLC and Hellman & Friedman LLC have agreed to acquire Neuberger Berman, the 69-year-old asset management firm, and the fixed income and certain alternative asset management businesses of Lehman Brothers' Investment Management Division.

As part of the transaction, a new, independent investment management company will be created comprising businesses that managed more than $230 billion of assets as of August 31, 2008, the firms said in an announcement. Neuberger Berman will be its largest operating unit, and together with the fixed income and alternative asset management businesses, will form the core of the new entity.

George Walker, global head of investment management for Lehman Brothers, will be chief executive of the overall company, Neuberger Investment Management, and Joe Amato will continue to lead Neuberger Berman. Neuberger Investment Management will offer a broad suite of investment management products, including high net worth, separately managed accounts, institutional, fixed income, mutual funds, and alternative assets, including private equity, according to the announcement.

Bain Capital Partners and Hellman & Friedman say they have committed to an all-equity transaction in which they will be equal partners in the new company. Portfolio managers and management will also own a significant stake and will increase their ownership over time through an ongoing, equity-based compensation program.

The transaction is expected to be completed by early 2009 and is subject to satisfaction of certain closing conditions, including the Lehman Brothers Holdings Bankruptcy Court approval.

The cash transaction with Lehman Brothers Holdings Inc. results in a valuation of $2.15 billion for the businesses being acquired.