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Rating:Neuberger Auction Crack Up Leaves Walker in Charge
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Thursday, December 04, 2008

Neuberger Auction Crack Up Leaves Walker in Charge

Reported by Sean Hanna, Editor in Chief

The WSJ adds onto the news first broken by the NY Times yesterday afternoon that Nueberger Berman has ended up in the hands of its employees and under the direction of George Walker. The deal comes after a bankruptcy-court-run auction fell apart leaving no outsiders interested in the money manager.

Bain Capital LLC and Hellman & Friedman LLC, the two private equity firms that submitted an initial bid in September, pulled their bid after the decline in the stock market whacked Neuberger's value. No other bidders emerged, even with a deadline extension from the court. As a result, Lehman creditors will control 93 percent of the preferred stock in Lehman valued at $875 million and Nueberger management will control a 51 percent stake in the money manager.

With the collapse of any deal with outsiders, Neuberger finds itself in a challenging situation. The money manager has seen significant defections in the ranks of its portfolio management teams -- the WSJ points to Steven Brown's jump to American Century and the departure of Milu Komer. It has also seen the ranks of its sales and support teams thinned by the uncertainty created by the Lehman bankruptcy and the uncertainty created by the failed-auction. 

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