Lehman Shops Key Unit in Quest for Cash

The troubled Wall Street firm is taking offers for its strong fund management wing
By Clay Dillow,  Newser Staff
Posted Aug 19, 2008 8:50 AM CDT
Lehman Brothers, in an attempt to create some liquidity, is seeking a buyer for its investment-management unit.   (AP Photo/Katsumi Kasahara)
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(Newser) – Lehman Brothers is shopping a piece of its investment management unit, the Wall Street Journal reports, joining other large banks in shedding strong-performing businesses to offset mortgage meltdown losses. Lehman’s management business, which includes Neuberger Berman and hosts 27 mutual funds managing $22 billion in individual and institutional wealth, has been a rare bright spot for the company.

Potential buyers include private-equity firms Carlyle Group, Hellman and Friedman and General Atlantic; the publicly-traded Blackstone Group has reportedly expressed an interest as well. The business has been valued at $8-10 billion, just shy of Lehman’s overall market cap, eroded by a 77% drop in share price this year. Merill Lynch and Citigroup have both sold off divisions of their firms recently to generate cash in an illiquid marketplace.