Bain Capital Partners and Hellman & Friedman, two of the world’s leading private equity firms – agreed on Monday to acquire Neuberger Berman, the 69-year-old asset management firm owned by the failed investment bank Lehman Brothers (LEHMQ).
The cash transaction, which includes the fixed income and certain alternative asset management businesses of Lehman’s Investment Management Division, resulted in a valuation of $2.15 billion for the businesses being acquired. Lehman bought Neuberger in fiscal ’03 for $3.2 billion to expand its reach in wealth management. The entire investment management unit, which offers separately managed accounts, mutual funds and advice to high net worth and institutional investors, was valued at about $10 billion before the bankruptcy.
As part of the transaction, which excludes Lehman’s major direct private equity businesses such as Merchant Banking, Real Estate, Venture Capital and MLP — a new, independent investment management company will be created comprising businesses that managed more than $230 billion of assets as of August 31, 2008.
“We are excited and energized about what this means for our clients and our employees,” George Walker, global head of investment management for Lehman Brothers said in a statement. “I can’t think of two better partners than Bain Capital and Hellman & Friedman, with proven track records of creating value in financial services, and asset management in particular. Our portfolio management and client teams are extremely enthusiastic about this next chapter in our history.”
The deal requires bankruptcy court approval and is expected to be completed by early 2009. Lehman Brothers Holdings filed for Chapter 11 earlier this month.