Last major Lehman unit to go to two buyout firms

NEW YORK - Lehman Bros. Holdings Inc. agreed yesterday to sell its investment-management business to a pair of private-equity firms, fetching $2.15 billion as the bankrupt investment bank continued its liquidation.

Bain Capital Partners L.L.C. and Hellman & Friedman L.L.C., two of the nation's biggest buyout firms, will now control Lehman's operations in fixed-income and alternative-asset management. The deal includes money-management firm Neuberger Berman Management Inc., a 69-year-old name on Wall Street that now manages more than $130 billion of investments.

Lehman has been scrambling to sell off healthy portions of the company, whose bankruptcy filing Sept. 15 was the biggest in U.S. history. The investment house sold its key North American businesses, including investment banking, to Britain's Barclays P.L.C. for $1.7 billion in cash. Nomura Holdings Inc., Japan's largest brokerage, bought Lehman's operations in Europe, the Middle East and Asia.

The purchase of Neuberger Berman and Lehman's other investment-management businesses marks the last major unit to be sold off.

Lehman bought Neuberger, of New York, in 2003 for $3.2 billion to expand its reach into wealth management. The entire investment-management unit was valued at as much as $10 billion before the bankruptcy.

Founded in 1939 by Roy Neuberger, the firm has specialized in managing money for wealthy clients. It is also considered to be a pioneer in making mutual funds more widely accessible.

The transaction also includes Lehman's $35 billion private-equity business, which manages real estate and leveraged-buyout funds. The sale does not include Lehman's stakes in hedge fund managers GLG Partners Inc. and Ospraie Management L.L.C.

The sale must be approved by a federal Bankruptcy Court.