GLOBAL - Barclays Group has purchased key elements of Lehman Brothers investment banking so part of that deal appears to be to take on the firm's transition management services to pension funds.
No progress has been made yet, however, on the sale of Lehman's asset management wing.
Barclays Group today confirmed it is buying Lehman's North American investment banking and capital markets business, which includes taking on around 10,000 staff, its New York headquarters and two data centres, for a total sum of £1bn (€1.25bn).
Officials at Barclays are still seeking confirmation however its understanding is transition management is still considered to be deemed part of Lehman's investment banking so would have been part of the sale of the US operations.
Many European pension funds have employed Lehman over the years to conduct their transition management, including the likes of the UK's Pension Protection Fund (PPF) the National Pension Reserve Fund (NPRF) and the Strathclyde local authority pension fund.
The technical breakdown of Barclays's purchase prices Lehman's 10,000 investment banking staff as within trading assets worth £40bn and trading liabilities of £38bn so is officially purchased at £140m, but additional fundraising of £600m may now be from Barclays shareholders to finance the deal.
The deal did not include the purchase of Lehman's ‘toxic bad book' of real estate and mortgage-backed business which the previous Lehman management had expected to spin off as a separate entity.
At this stage there is also still no news on the future of the asset management division through which many pension funds were also invested - including those in Lehman's real estate funds.
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