Lehman Brothers Holdings’ prized asset management unit Neuberger Berman is in play following the bankruptcy filing by the 158-year-old Wall Street
Lehman Brothers Holdings’ prized asset management unit Neuberger Berman is in play following the bankruptcy filing by the 158-year-old Wall Street investment bank. A management buyout of the private equity division is one of the options being bandied around in the event that a sale of the asset management division, which is not in bankruptcy and had already been put up for auction in a vain bid to raise cash, falls through.
Lehman is a major investor in its private equity funds and has decided to meet future capital calls for investments. However, the firm’s bankruptcy filing could trigger a material adverse change clause that would close the spigot to new funding, adding to the pressure for a quick sale.
London-based banking group Barclays, which has agreed to buy Lehman’s US investment banking business, could have faced regulatory hurdles had it sought to buy the whole of the battered bank, as it was considering last weekend, because funds within its iShares ETF business, the world’s biggest, track Lehman indices. The Securities and Exchange Commission generally bars firms from basing exchange-traded funds on benchmarks they own due to potential conflicts of interest.
Private equity executives were in sombre mood at a Dow Jones industry conference in New York this week amid the tumultuous developments on Wall Street. Having fewer providers of capital won’t do the industry any good, according to Richard Friedman, global head of merchant banking at Goldman Sachs. Friedman and Thomas H. Lee’s Scott Sperling argued that prices being asked for businesses are still too high, while CalPERS portfolio manager Michael Dutton said investors had to raise the bar and undertake more due diligence.
European financial services firm Fortis has closed three hedge funds due to increased investor withdrawals, the absence of new capital and personnel changes. The funds, following European long/short, convertible arbitrage and US long/short strategies, were closed down over the course of the last nine months. Fortis says it plans to launch new funds with its own money.
Stanley Fink has joined International Standard Asset Management as chief executive. In his former incarnation with Man Group, Fink has long been one of the UK hedge fund industry’s most high-profile and respected figures. He stepped down as Man’s chief executive in March 2007 but stayed on as deputy chairman, retiring from the board this July. In his new role, he will work alongside entrepreneur, financier and Labour Party fundraiser Lord Levy, who has joined International Standard as chairman. The firm, which was established by Roy Sher in 2003, currently runs a gold fund and a macro fund.
Citadel Investment Group has brought Tobias Gehrke and Anita Nassar on board from Merrill Lynch. Both executives have worked with sovereign wealth funds and will now spearhead the USD20bn Chicago-based manager’s international distribution and marketing efforts. Gehrke and Nassar co-headed government institutional sales at Merrill, which on Sunday agreed to be acquired by Bank of America.
SAC Capital of Stamford, Connecticut, has added some professionals to its London unit, which is changing its name to SAC Global Investors from Walter Capital Management. Among its new hires are Mike Corcell, an alumnus of Threadneedle Asset Management, Ali Akay, an emerging markets specialist from HBK, global utilities expert Israa Bayne, who was at Electron Capital, and former JPMorgan financials analyst Ashley Stuart.
The investment arm of troubled insurer American International Group has hired Michael Chae from Nikko Citi as a director of alternative investments in Japan, reporting to Tokyo-based managing director Stewart Homler. The appointment was announced before the US government bailed out AIG with an USD85bn emergency loan and became owner of 80 per cent of AIG. Ironically, one of Chae’s areas of responsibility is distressed securities.
Nine investment professionals from the New York and London offices of Pioneer Alternative Investments have left the firm, but Pioneer insists the departures will not dent its fund of hedge funds business, thanks to the deep bench of talent it has built up. Dublin-based Pioneer is owned by Italy’s UniCredit.
