Bain, Hellman to buy Neuberger for $2.15bn

The transaction will not include Lehman Brothers' major private equity businesses like merchant banking, real estate, venture capital and master limited partnerships. The deal will include some of Lehman's private equity fund of funds and the firm's debut infrastructure fund, which has been targeting $1bn.

Bain Capital and Hellman & Friedman have agreed to acquire Lehman Brothers' asset management business Neuberger Berman, as well as some alternative asset management units, for $2.15 billion (€1.5 billion).

The deal will not include Lehman Brother's major private equity businesses like merchant banking, real estate, venture capital and master limited partnerships, according to a statement from Neuberger. Also, Lehman Brothers' limited partner investments in the acquired funds will not be included in the sale.

Bain and Hellman are committing a 100 percent equity stake to become equal partners in the new investment management business, which will be called Neuberger Investment Management. The firm will be comprised of Neuberger Berman as well as some of Lehman's asset management and private funds units, including fixed income, private equity fund of funds and secondaries. The deal also will involve some of Lehman's co-investments and several start-up private equity businesses, including its debut infrastructure fund, which is targeting $1bn.

Michael Odrich, head of Lehman's private equity group, and Tony Tutrone, head of its private funds investment group, will both join the new firm.

The deal is expected to be complete by early 2009 and will be subject to closing conditions like bankruptcy court approval.

Lehman Brothers Holding Company filed for bankruptcy on 15 September after the US government declined to bail out the struggling 158-year-old investment bank.

Cezary Podkul contributed to this article.