Lehman to Spin Out Private Equity: Report

The private-equity arm of Lehman Brothers has reached an agreement with its collapsed parent to spin out into an independent firm, while taking in a new investment from luxury-goods billionaire Johann Rupert, the Wall Street Journal reports.

As part of the move, the newspaper reports, the Lehman bankruptcy estate will retain a substantial interest in the private-equity shop, called Lehman Brothers Merchant Banking. The business has $4.5 billion under management.

The deal also involves South African billionaire Rupert, whose investment company Reinet Investments SCA will assume $250 million in unfunded commitments to the fund, according to the Journal. ...