Reinet Investments, the Luxembourg-based investment vehicle of South African billionaire Johann Rupert, has agreed to buy two private equity funds from the bankrupt bank Lehman Brothers.
Reinet said it will take control of Lehman Brothers Merchant Banking Partners IV and Lehman Brothers Merchant Banking Partners IV (Europe). As part of the transaction Reinet has agreed to commit up to $230 million to the two funds over the next three and a half years.
Lehman Brothers Merchant Banking has raised and managed four institutional funds and several employee investment vehicles, with total committed capital in excess of $8 billion, since its inception in 1986.
To date, Lehman's funds have made investments of some $800 million. Further commitments by limited partners to invest in the funds currently amount to around $1.7 billion.
Lehman has been in the process of selling its private equity, venture capital and real estate funds since the former investment bank filed the largest bankruptcy in history in September.
A Lehman management group won a bankruptcy auction in December for the bank's investment management division, including Neuberger Berman, beating a $2.15 billion bid from private equity firms Bain Capital and Hellman & Friedman. The sale also including some private equity funds and its infrastructure fund.
The Reinet transaction is subject to the approval of the funds' limited partners.