South African billionaire Johann Rupert has teamed up with managers from Lehman Brothers Merchant Banking Partners to acquire the failed investment bank’s private equity business.
The reborn buyout business will be led by Vittorio Pignatti-Morano, previously head of Lehman private equity in Europe and the Middle East. Pignatti-Morano and four partners will pay $10m (€7.86m) for 51 per cent of the company, change its name and move to offices in New York and London.
Rupert, the head of the luxury goods business Richemont, will acquire the remaining 49 per cent stake through his Luxembourg-listed Reinet holding company.
He will also take on Lehman’s $230m of outstanding commitments to Lehman private equity’s latest fund, which will be downsized from $3.3bn to roughly $2.5bn.
According to the Financial Times, votes from the 320 investors in Lehman Brothers Merchant Banking were being counted last night to decide on whether to support the rescue deal. It is expected that the deal will have enough support to proceed.
The Lehman private equity division has approximately $3.4bn of assets under management, predominantly in the US and Europe, but had to make significant concessions to its new investors to secure the rescue transaction.
It offered to reduce the undrawn commitments of investors or cut fees from 1.5 per cent to 1.2 per cent.