Who Wants A 20% Stake In A Fabulously Successful Hedge Fund?

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Nobody, apparently.

One of the prime assets that the estate of the bankrupt Lehman Brothers still has to sell is a 20 percent stake in the $22 billion hedge fund D. E. Shaw. But so far, Lehman has found no takers.

Over the last six months, the Lehman estate has been trying to drum up interest in the stake, which the Wall Street bank bought a year before it collapsed. But few investment firms solicited by the Goldman Sachs bankers who are shopping it have shown much interest in what is one of the industry’s more successful trading firms.

The main stumbling block is not the price — Lehman wants $550 million to $800 million for the stake, according to people briefed on the matter, including some who considered bidding on it. Rather, it is the terms of ownership that were negotiated by Lehman in the spring of 2007, these people said.

Well, if we’re being totally honest, the price doesn’t help.

One hedge fund manager with knowledge of the arrangements who spoke on condition of anonymity, said precrisis deals assumed a higher valuation than many of the funds were now worth. The manager said those deals assumed that a hedge fund was worth 15 times as much as its revenue. Now, a single-digit multiple is more realistic.

For Sale: 20% Stake in Hedge Fund. Terms: Complicated. [DealBook]

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