When Neuberger Berman employees walk into their offices Dec. 22, they'll do so as owners.
Employees at the New York-based manager made the final equity payment to purchase the portion of the firm still held by the estate of Lehman Brothers Holdings on Dec. 19, said George Walker, Neuberger Berman chairman and CEO.
“It won't change in any way shape or form how we manage the business. But it'll be a nice close to that chapter in the firm's history,” Mr. Walker said in a phone interview.
The former Wall Street banking giant bought Neuberger in 2003, but Lehman Brothers went bankrupt in September 2008.
Neuberger became independent again in May 2009, but the Lehman estate still held a minority stake in the money manager. In 2011, Neuberger Berman employees made an agreement to purchase over the next five years the 48% of the firm held by the Lehman estate. But through increased cash flow and several employees taking the option to buy equity stakes in the company, Neuberger was able to accelerate the purchasing process.
Mr. Walker declined to disclose the value of the final or total payment. However, sources familiar with the matter said the final equity payment was approximately 6% or about $90 million, valuing Lehman's monetization of Neuberger holdings at roughly $1.5 billion in aggregate proceeds.
Neuberger Berman had $247 billion in assets under management as of Sept. 30.
This article originally appeared in the December 22, 2014 print issue as, "Neuberger Berman employees put a bow on buyback".