June 15 Investment firm Affiliated Managers Group Inc (AMG) has reached an in-principle agreement to buy a stake in hedge fund manager D.E. Shaw & Co LP from the estate of Lehman Brothers Holdings Inc, the Wall Street Journal reported on Sunday.
The deal is the latest sign of an asset manager coveting a slice of a hedge fund manager's fees as banks that have traditionally backed hedge funds retrench due to regulations implemented in the aftermath of the 2008 financial crisis.
AMG has bid more than $500 million for the 20 percent stake for sale by Lehman, the financial newspaper reported on its website, citing people familiar with the matter it did not identify. A final deal is not imminent and talks could still fall apart, it added.
Lehman, a U.S. investment bank whose collapse was a major contributor to the 2008 crisis, paid between $750 million and $800 million for the stake in 2007, the Wall Street Journal said.
AMG and D.E. Shaw representatives did not respond to requests for comment while a Lehman estate spokeswoman declined to comment.
New York-based D.E. Shaw has about $32 billion in investment capital, according to its website. It was founded in 1988 by David Shaw, a former Columbia University computer science professor.
Boston-based AMG has $594 billion in assets under management. These assets including stakes in hedge fund managers BlueMountain Capital Management LLC, ValueAct Capital Management LP and AQR Capital Management LLC, according to its website.
Lehman emerged from bankruptcy in 2012 and its estate has been gradually unwinding its assets since. (Reporting by Greg Roumeliotis in New York; Editing by Eric Walsh)