NEW YORK -- Lehman Brothers is holding an auction to sell its investment management unit that includes the Neuberger Berman money management business. There are three bidders.

The auction is scheduled for noon Wednesday, and Lehman lawyer Shai Waisman said it could last most of the day.

One of the bidders is a group that includes private equity firms Bain Capital Partners and Hellman & Friedman. In September, that group had proposed paying $2.15 billion.

If their bid is successful, the private equity firms will create a new, independent investment management company encompassing the businesses, which managed more than $230 billion of assets as of Aug. 31. Neuberger Berman will be the largest operating unit of the new company and, with the fixed income and alternative asset management units, will form its core.

Bain and Hellman & Friedman would split the investment evenly. Neuberger and former Lehman portfolio managers and management will also take ownership stakes and them over time through an equity-based compensation program.

As recently as August, Lehman's investment-management unit was valued at about $7 billion by analysts, the

Wall Street Journal

has reported.

Lehman's Sept. 15 bankruptcy, six months after the fire sale of

Bear Stearns

, came at the beginning of a tumultuous month on Wall Street. The federal government has engineered takeovers of

Fannie Mae



Freddie Mac




(AIG) - Get Report

and regulators seized

Washington Mutual

(WM) - Get Report

and brokered a sale of its deposits and assets to

JPMorgan Chase

(JPM) - Get Report

. Former investment banks

Goldman Sachs

(GS) - Get Report


Morgan Stanley

(MS) - Get Report

asked to be made into traditional bank holding companies in order to stave off a market attack on their shares.

Waisman declined to say who the other two bidders are or what they bid.

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