Bain, Hellman & Friedman Buy Neuberger Berman*

UPDATE: Bain and Hellman &Friedman have reached a deal to buy Neuberger Berman for $2.15 billion.  According to the New York Post, as of August 31, Lehman’s business managed $230 billion in assets.

EARLIER: More than a week after the deal was announced, private equity firms Bain Capital and Hellman & Friedman are close to finalising a deal to acquire Lehman Brothers’ investment-management division, including Neuberger Berman and possibly the firm’s in-house private-equity arm, Lehman Brothers Merchant Banking.

WSJ: Private-equity firms Bain Capital LLC and Hellman & Friedman LLC were pushing to finalise a deal Sunday night to acquire a large chunk of Lehman Brothers Holdings Inc.’s investment-management unit, including its prized Neuberger Berman division, according to people familiar with the transaction.

The transaction, which was set to be announced more than a week ago, has been held up by a number of sticky issues. Those include protracted contract negotiations with Neuberger’s money managers, a group that caters largely to wealthy individuals and has practical autonomy as to how it manages client portfolios…

People involved with the discussions have described the process of persuading them to sign on to the deal as something akin to “herding cats.” Also, the buyers have wrestled with how to structure the acquisition of Lehman’s private-equity businesses, some of which could be part of the transaction. Those include the firm’s flagship buyout unit, Lehman Brothers Merchant Banking, which oversees about $8 billion in capital.

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