LONDON Oct 19 The $100 billion Texas Teachers'
pension fund is to buy a stake in Formula One racing from the
estate of collapsed investment bank Lehman Brothers, a person
familiar with the matter said.
The Teacher Retirement System of Texas will buy a 3 percent
stake in the motor racing business from the Lehman Brothers'
estate in a deal worth about $200 million, the person said.
It follows a string of powerful investors that have bought
into Formula 1, which organises motor races across Europe, the
Middle East, Asia and the Americas, as owner CVC, one
of Europe's largest buyout firms, gradually reduces its stake.
BlackRock, Waddell & Reed and Norges Bank Investment
management invested in the company when public markets shunned a
planned initial public offering of the Formula 1 business.
Together with Texas Teachers, the investment groups will own
some 30 percent of the business.
Texas Teachers' deal for a portion of the Lehman Brothers
stake values the equity in Formula 1 at about $7 billion, the
The private equity group refinanced Formula 1 earlier this
year, raising $1 billion for future dividends to investors and
CVC assembled a majority stake in Formula 1 by 2006, buying
out a number of minority investors for undisclosed amounts.
It still owns 35.5 percent of the company run by Bernie
Ecclestone, who has been under investigation by German
prosecutors in a bribery scandal, though no charges have been
filed against him.
Ecclestone denies wrongdoing and has said he was the victim
of coercion by a banker.
The sale of the 3 percent stake will be the first reduction
in the Lehman Brothers' holding in Formula 1 since the bank
collapsed four years ago.
The Lehman estate still owns 12 percent in the business,
which at the current price is worth some $800 million.
The Texas Teachers' pension fund serves more than 1.3
million employed and retired teachers and had net assets of $101
billion at end-September 2011.
The pension fund is one of the world's largest private
equity investors and has invested billions of dollars with firms
including Apollo and KKR.
CVC declined to comment. The Teacher Retirement System of
Texas and Lehman were unavailable to comment.