The big question for me right now is what will become of Lehman Brothers’ private equity unit, which has around $35 billion in assets under management. This includes buyout funds, venture capital funds, funds-of-funds and fund placement activities.
Lehman said in a press release last night that has resumed plans to sell off its investment management unit — of which private equity is a part — which had been put on hold when it seemed that either Barclays or BoA would buy the entire institution. The open question, however, is whether that sale would be for 55% of the IM unit (as originally anticipated) or for much more. I say it’s open because I hear that all options are currently on the table, and that we should have an answer within days. Original bidders reportedly included Bain Capital, Hellman & Friedman and KKR — so we might have an odd situation whereby one of those firms holds a substantial private equity practice as a portfolio company. Should make for some unique firewalls.
It also seems that there is finally some discussion emerging about the private equity group attempting an independent spinout (e.g., CCMP Capital, the original Metalmark Capital, etc.), although no real groundwork has been laid yet. It is certainly an issue of chatter among LPs.
Worth emphasizing that Lehman’s private equity group is not part of the bankruptcy filing, nor are the Lehman broker-dealers that have made cornerstone commitments to the group‘s various funds. As of right now, the entire Lehman private equity team is employed and working (they are not among those walking around with cardboard boxes). That said, the secondary markets are already buzzing about Lehman stakes going up for sale…