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Cape Town - The Rupert family controlled Reinet Investments will scavenge the Lehman Brothers bankruptcy estate for its first major deal since listing in late 2008.
On Wednesday night, Reinet confirmed speculation earlier this month that it would invest in private equity entities belonging to fallen financial giant Lehman Brothers.
Reinet said it had entered into an agreement in conjunction with the management team of Lehman Brothers Merchant Banking (LBMB) to buy certain parts of the private equity business.
The private equity funds in question are Lehman Brothers Merchant Banking Partners IV LP and Lehman Brothers Merchant Banking Partners IV (Europe) LP.
Reinet explained that part of transaction would see the company committing to $230m to both existing and new investments in the respective funds over three and a half years.
Reinet would also participate in decisions around all future investments by the funds - which have been quaintly dubbed Lehman Brothers' "mid-market buyout shop" by certain sections of the US media.
According to a fact sheet, LBMB manages funds that seek significant long-term capital appreciation through direct investments in established operating companies in partnership with management.
Reinet said the LBMB funds invested in companies with sound business fundamentals, proven operating teams and a compelling business strategy.
To date the LBMB funds - which may well assume a new corporate identity in the months ahead - have made investments of around $800m.
The LBMB funds hold stakes in about a dozen small-cap to mid-cap companies - most notably railroad equipment manufacturer Panentes Talgo SA, hospital linen specialist Angelica Corp, and SRAM Corporation (a Chicago-based maker of high performance bicycle components).
- Fin24.com