30/06/2008

Lehman and Aladdin to raise $3bn seed money for small hedge funds

Lehman Brothers and US credit manager Aladdin Capital have announced plans to raise $3bn. The money will be used to back small hedge fund managers in the hope of capitalising on the worst dislocation in the industry for a decade.

Lehman Brothers aims to raise $3bn to $5bn for a fund to buy strategic minority stakes in hedge fund managers, according to sources at the bank. The fund, which has been called Omega, plans to invest in up to 12 managers, and follows a series of investments by Lehman, including stakes in GLG Partners, DE Shaw, and BlueBay Asset Management. Lehman declined to comment.

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