Neuberger Auction: Jeff Lane, Carlyle Want To Keep It Real

Dick Fuld’s inability to monetize part or fall of Lehman Brothers Neuberger & Berman asset management operation contributed to his downfall. Of course, getting a bunch or irate money managers on the same page after they watched their parents stock implode was probably not too easy, and the employees no doubt demanded huge retention packages to stick around.

It was a clusterfuck pure and simple, and now Neuberger probably only managers half the assets they did 6 months ago, if not less.

I had originally pegged the value of the subsidiary at $5 billion while analysts spoke of a number closer to $8 billion.

The eventual deal to sell the company after Lehman imploded was far more modest-Bain Capital and Hellman & Friedman announced they would purchase the venerable operation for $2.15 billion a few weeks ago.

But ex-Neuberger honcho Jeff Lane, who put in a brief stint as the head of Bear Stearns Asset Managment after Jimmy Cayne booted Richard Marin, is now trying to put in a competing bid, although it is unclear if this is on behalf of his new employer, Modern Bank.

Private-equity firm Carlyle Group has teamed up with former Neuberger Berman chief executive officer Jeffrey Lane to make a rival bid for Neuberger, the crown jewel of Lehman Brothers Holdings Inc.’s asset-management unit.

Late last month, Bain Capital LLC and Hellman & Friedman LLC’s announced an acquisition of Neuberger and other Lehman money-management assets for $2.15 billion. The price paid by Bain and Hellman—about half the firms’ initial bids—was a steep discount to the amount Neuberger would have sold for prior to Lehman’s collapse......The private-equity firm argues that the actual price is closer to $1.55 billion due to provisions and adjustments in the sale agreement. It demands a “real auction” for the assets. A federal bankruptcy court will hold a hearing Thursday on the matter. Judge James Peck, which has yet to approve Bain and Hellman’s acquisition, will also hear objections to the deal from the official creditors committee and unofficial bondholders group.

Never underestimate the ability of Wall Street bigwigs to mess up a seemingly healthy operation. Maybe Lane can salvage something, and perhaps a chairman emeritus role can be found for 105 year-old Roy Neuberger.

God only knows what he thinks about all of this.
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Jeffrey Lane
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Carlyle, Lane to Launch Bid for Neuberger
WSJ
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