Many professionals hailing from the LBO arms and fund placement segments of last year’s fallen financial giants have spent the past year carving out new homes for themselves within the embattled financial arena. Others, meanwhile, seem to just now be finding their way.
Bear Stearns Merchant Banking quickly transitioned into a new, independent entity following the collapse of its parent companies (see table). Led by CEO John Howard, the 34-person firm, now called Irving Place Capital Partners, continues to work through a $2.7 billion fund closed in 2006, inking one platform acquisition this year while filing to take a portfolio company public.
Neuberger Berman, the asset management business of Lehman Brothers, has also landed on its feet. The firm became independent after its own employees outbid a $2.15 billion buyout offer from Bain Capital and Hellman & Friedman in December 2008. Currently, the New York-based firm is raising a handful of investment vehicles to invest in private equity funds, secondary interests, Texas-based companies, and infrastructure opportunities. Meanwhile, Charles Ayres and other fund managers from Lehman Brothers Merchant Banking, along with 50 other employees from Lehman’s buyout arm, have spun out of the defunct bank as Trilantic Capital Partners.
AIG Investments is a different story. The asset management arm of the crippled insurance giant, which includes a large funds-of-funds business, underwent a tumultuous auction process that finally drew to a close earlier this month. On September 6, Bridge Partners LP, a subsidiary of Hong-Kong buyout firm Pacific Century Group, agreed to purchase the company for around $500 million. The auction, which began in early 2009, reportedly drew offers from buyout firms such as Crestview Partners LP, Hellman & Friedman, Macquarie Group, TA Associates, and Temasek Holdings.
Elsewhere, the buyout arms of Bank of America and Merrill Lynch were thrown together when the two parent companies became Bank of America Merrill Lynch at the request of the government. Bank of America Capital Investors and Merrill Lynch Global Private Equity now operate their respective funds under an umbrella called BAML Capital Partners. Future funds, managed by team members from each side, will likely be raised under that name.
On the fund placement side, Bank of America Merrill Lynch is currently winding down its group, the oldest in the business. As for Lehman’s placement arm, much of the group had earlier left for Greenhill & Co. Similarly, the core of the Bear Stearns fund placement group found a home at Brookfield Asset Management, the Toronto-based asset management company.