Lehman's Final Three

Posted by guest, Aug 27, 2008 9:56AM

Don't know how they are going to keep the PMs there. Know of a couple of the big ones who would prefer owning the business themselves; can't imagine they want to work for PE overlords.

Posted by guest, Aug 27, 2008 9:56AM

you are obviously an expert on this if you have never heard of hellman

Posted by guest, Aug 27, 2008 10:03AM

2 Ownership structure is always a challenge at an asset management firm, because of the way it impacts comp. And complicated at a place like NB, which is not as focused as say AllianceBernstein. That is, NB is primarily HNW with low grade institutional thrown in. An unusual business model.

Posted by guest, Aug 27, 2008 10:24AM

@4 Aside from HNW and instos, they also have a small and decent mutual fund base, but a small number of DC assets.

Posted by guest, Aug 27, 2008 10:43AM

#2 here: it is like a series of fiefdoms, each PM with his/her own team and clients. Believe they are all vested now; can't imagine they'd hang around after a sale without major, major incentive or a major piece of the action.

Posted by guest, Aug 27, 2008 10:52AM

Hellman & Friedman.............these West Coast guys are specialised in tech and media.

Very interesting that they are through to the second round.

The old adage of auction is: strengthen the weakest bidder. Hellman & Friedman is definitely the weakest of the group and they probably got a helping hand from Lehman.

Posted by guest, Aug 27, 2008 10:54AM

It's all about the Mayo.

Posted by guest, Aug 27, 2008 10:59AM

@8 - what is the logic in strengthening the weakest bidder in an auction, just curious.

Posted by guest, Aug 27, 2008 11:11AM

@ 3. I have heard of Hellman. I told you, they are the mayonaise people.

I see from 8 that they are some californians that probably don't wear socks, and specialize in the two mainstays of Smoke and Mirrors.

No, really not into Hellman. Unless it's mayonaise.

Posted by guest, Aug 27, 2008 11:34AM

@10, strengthening the weakest bidder helps maximise the price in most cases. This throws a spanner into the works so to speak and build some tension into the auction.

Keeping H&F in the auction will have the KKR guys scratching their heads a bit. They will now have to revise some of their assumptions and financial projections and raise their offer.

If it was KKR vs. Blackstone vs. Carlyle in the second round (possibly the last), Lehman runs the risk of these guys colluding and forming a club bid. The KKR guys know the style and metrics of their counterparts at Carlyle and Blackstone and vice versa. Their bids would be very similar and Lehman/Lazard knows they can't have all three of them through to the second round.

I would also speculate that there must be some sizable tech or media assets in Lehman's asset management business. Lehman/Lazard must have disclosed some information of the assets when they invite H&F to bid.

Posted by guest, Aug 27, 2008 11:44AM

"If it was KKR vs. Blackstone vs. Carlyle in the second round" ~~ well, it's not, is it?

"I would also speculate that there must be some sizable tech or media assets in Lehman's asset management business." ~~ gee, ya don't think Hellman is there for the real estate portfolio?

Posted by guest, Aug 27, 2008 2:13PM

are there any other PE owned money management firms?