Lehman Brothers Holdings sold the management contract for its real estate funds to the former executives who ran the business, CEO Bryan Marsal said.
The investors in the funds “chose overwhelmingly to support a bid led by former management,” Mr. Marsal wrote in an e-mail. “This is not surprising in that the fund managers have detailed knowledge of the portfolio and good historic performance.”
The sale involves three private funds, Lehman Brothers Real Estate Partners I, II and III, with combined capital commitments of about $5.6 billion. Brett Bossung and Mark Newman, who managed the funds before Lehman's September 2008 bankruptcy, led the group of five former executives who bought the business.
Messrs. Bossung and Newman will resume day-to-day fund management, while Mark Walsh, their former boss, will “focus on the growth of the business and asset management,” Kimberly Macleod, a Lehman spokeswoman, wrote in an e-mail.
The former Lehman executives agreed in June 2009 to pay Lehman about $10 million for the rights to the unit's management contract, a person familiar with the matter said at the time. Ms. Macleod declined to specify the price in the completed deal.
Messrs. Bossung, Newman and Walsh declined to comment.
Lehman invested more than $1 billion out of $5.6 billion of equity in the three funds since 2000. Lehman represents 20% of total commitments across the three funds, said Ms. Macleod.