Lehman Brothers' private equity real estate business, Lehman Brothers Real Estate, could be spun-out in a management buy-out, according to media reports. It follows the collapse of the US-based investment banking giant, which filed for Chapter 11 bankruptcy in September.
The global heads of the private equity real estate firm, Mark Newman and Brett Bossung, along with the firm’s European head Gerald Parkes, were aiming to take control of the business, according to a report today in Property Week. Lehman was not available for comment.
The investment bank filed for Chapter 11 bankruptcy protection on September 15 after failing to find a buyer when the US Federal Reserve refused to provide guarantees for the bank’s liabilities. Both UK bank Barclays and US bank Bank of America walked away from talks to buy the 158-year-old investment bank.
The private equity real estate business is believed to be 20 percent owned by the bank and management team – the stake being sold as part of its bankruptcy and now being targeted by Newman, Bossung and Parkes – with the majority held by third parties.
Just days prior to Lehman’s bankruptcy, Lehman Brothers Real Estate closed its latest opportunistic global vehicle, the $3.2 billion Lehman Brothers Real Estate Partners III.