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Portfolio > Alternative Investments > Hedge Funds

Lehman to Acquire Neuberger Berman

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NEW YORK (–Lehman Brothers Holdings Inc. and Neuberger Berman Inc. agreed on a US$2.625 billion deal that will result in a money manager with more than US$100 billion in assets, including hedge funds and other alternative investments.

While Lehman relies heavily on bond trading for revenue, Neuberger Berman is focused on products for high-net-worth investors. These funds and accounts based on traditional and alternative strategies presumably will be distributed through the Lehman network once the acquisition is complete.

Neuberger is to become part of Lehman’s wealth and asset management division, which is headed by Theodore Janulis. Neuberger’s current chief, Jeffrey Lane, will be a vice chairman of Lehman Brothers, as well as chairman of the wealth and asset management division.

According to the deal, each Neuberger Berman shareholder will receive the equivalent of US$41.48 a share, consisting of US$9.49 in cash and 0.496 shares of Lehman Brothers common stock. The 32 active Neuberger partners who lead most of the wealth management teams will convert their shares into cash and Lehman Brothers stock on the same basis as other shareholders.

The transaction has been agreed on by the boards of directors of both companies but is subject to approval by Neuberger shareholders and regulatory agencies and other conditions.

Neuberger has been on the hedge fund radar screen in recent years. It hired the Lipper & Co. high-yield bond team when that firm collapsed after sustaining large losses in convertible arbitrage Previous HedgeWorld Story. And late last year Neuberger announced that it had purchased the hedge fund firm LibertyView Capital Management Inc., Hoboken, N.J. * Previous HedgeWorld Story.

*Three of LibertyView Capital Management Inc.’s hedge funds are listed in HedgeWorld Markets, administered in the U.S.A by HedgeWorld Markets USA Inc., (Member NASD/SIPC) an affiliate of HedgeWorld Ltd.

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