Jilted Lehman plans aggressive expansion in Europe

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The Independent Online

Lehman Brothers, the US bank which recently lost the battle to take over blue-blooded stockbroker Cazenove, is planning an aggressive expansion in fund management in Europe.

This is likely to include a number of acquisitions.

Lehman is understood to be in talks to buy the 80 per cent of hedge fund group GLG Partners that it does not already own, for around £1bn.

However, it is understood to be looking for a more conventional fund management business too. Last year it paid $2.6bn (£1.4bn) for fund manager Neuberger Berman in New York, a move that followed a long search for an appropriate acquisition.

Lehman recently hired Robert Sargent from Morgan Stanley Asset Management to head its nascent European business. A spokesman said he was studying the market and would decide how best to expand Lehman's presence in due course.

If Lehman had bought Cazenove, it would have acquired a fund manager with £7.4bn under management as well as the well-regarded stockbroker.

Lehman bid £500m for Cazenove with a potential further £250m depending on performance.

However, Cazenove preferred an offer from rival US bank JP Morgan, which is paying an initial £100m for a 50 per cent stake in the broker. The fund manager is not included in the deal and may be sold separately, with Lehman a potential bidder.