Lehman Brothers PE arm rescued

Lehman Brothers Merchant Banking Partners (LBMB), the private equity arm of the fallen US banking giant, is reported to have been rescued from the scrap-heap.

With baking from South African billionaire Johann Rupert, investors in the fund have agreed to the future of the outfit under the leadership of Vittorio Pignatti-Morano, the former head of Lehman Brother’s European private equity operations.

Pignatti-Morano and four partners are to pay US$10m for a 51% stake in the business, with Rupert owning the remainder and taking on Lehman’s US$230m of commitments to the most recent fund.

According to the FT, LBMB investors have been offered reduced fees on the latest fund which is set to shrink from US$3.3bn to US$2.5bn.