Pension funds are beginning to review their relationships with Lehman Brothers Holdings investment management units, including Neuberger Berman, after private equity managers Bain Capital and Hellman & Friedman announced Monday that they jointly will acquire the units.
Trustees of the $12.9 billion Ohio Police & Fire Pension Fund, Columbus, have placed Lehman Brothers Asset Management on the second level of the funds four-rung scale (one is no worry and four is termination), said spokesman David Graham. We recognize there is an issue here, and we are going to revisit the firm and step up our review of them. Lehman Brothers manages $181 million in high-yield bonds for the fund.
James Mohler, senior investment manager of the $6.5 billion Chicago Municipal Employees Annuity & Benefit Fund, said he expects to discuss the issue with trustees at the boards next meeting Oct. 16. Lehman Brothers managed $282 million in an enhanced bond index fund as of Dec. 31, according to the plans most recent annual report. The board will usually put (managers) on watch if ownership has changed. The board will continue evaluating them going forward, Mr. Mohler said.
Timothy Inklebarger and John DAntona Jr. contributed to this article