Bankrupt Lehman Brothers Holdings Inc. as expected is spinning out its private equity businesses backed by new investors, as The Deal's Vyvyan Tenorio
predicted it would back in September after the firm filed for bankruptcy.
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The failed investment bank reportedly reached an agreement to sell Lehman Brothers Merchant Banking and take in an investment from Johann Rubert, a South African billionaire. Other investors in the funds include the Pennsylvania Public School Employees' Retirement System, the New York City Retirement System and fund manager Caisse de depot et placement du Quebec.
The Lehman spinout has about $4.5 billion under management and holds stakes in more than a dozen portfolio companies including Panentes Talgo SA and Angelica Corp. It's most resent investment was a 40% stake in Sram Corp., a Chicago maker of high performance bicycle components. All of these companies and stakes are listed in The Deal's Pipeline.
Lazard ran the auction for restructuring adviser Alvarez & Marsal LLC. Lehman's advisers kept a stake in the business, even though Blackstone Group LP and Lexington Partners Inc. apparently expressed interest. The deal is similar to the Neuberger Berman LLC sale. Last month the estate decided to retain a 49% stake in Lehman's money management business, Neuberger Investment Management, and sell the balance to the firm's management led by George Walker, former global head of investment management. That estate has more than 100 direct stakes in private companies. - Maria Woehr
