Lehman, IBM dissolve $180m Asian joint venture

The joint venture to provide growth capital to Chinese companies was created in 2006 with commitments of $90m each from Lehman Brothers and International Business Machines.

A $180 million joint venture formed by Lehman Brothers and International Business Machines to invest in Chinese companies has been dissolved, according to a source with knowledge of the situation.

The joint venture, called the China Investment Fund, was formed in 2006 with commitments of $90 million each from the bank and the company. The joint venture was created to provide growth capital to mid-stage to mature public and private Chinese companies across various industries.

“The fund will offer Chinese businesses access to investment capital as well as best practice technology and business strategies,” Michael Odrich, Lehman’s global head of private equity, said in a 2006 statement.

The joint venture was structured so that Lehman and IBM each retained their contribution and used the money when investment opportunities arose, according to Fred McNeese, a spokesman with IBM.

IBM will continue to use its portion of the funds to target investment in Chinese companies, McNeese told PEO. Lehman declined to comment.

Some of the joint venture’s deals included a HK$132 million investment in 2007 in Kingdee International, a software company based in Shenzhen. The fund also led a $20 million investment in VeriSilicon Holdings, a computer chip design company, in 2007. 

Lehman filed the largest bankruptcy in history in September after the US government declined to rescue the failing bank. The bank has been selling off its assets in bankruptcy, and last week a Lehman management group beat out a private equity consortium to buy Lehman’s investment management division, including Neuberger Berman.