US investment bank Lehman Brothers has acquired a 20% interest in hedge fund manager DE Shaw Group for an undisclosed sum.
Lehman says it has acquired an interest in the top level investment-management entities of New York-based DE Shaw. The purchase, which occurred on 12 March, involved an up-front payment and future contingent payments.
DE Shaw was established in 1988 and now has more than 1000 employees across the US and internationally. The firm has $29 billion in aggregate investment capital.
The deal is the latest of a string of investments that Lehman has made in buy-side institutions and hedge funds. The bank already has minority ownership positions in GLG Partners, Marble Bar Asset Management and Ospraie Management and acquired a stake in Spinnaker Capital Group in January.
GeorgeWalker, global head of investment management, Lehman Brothers, says: "Our stake in the DE Shaw group, which offers a broad array of alternative and long-only products, is consistent with our pioneering program of minority positions in world-class investment platforms."
Lehman is just one of a number of Wall Street firms that are tapping into hedge funds in order to offer clients access to alternative products and to pocket a share of the fees that the funds generate.
Morgan Stanley has acquired stakes in four investment firms over the past few months, while Merrill Lynch bought a minority stake in New York-based hedge fund DiMaio Ahmad Capital in October.