Lehman raising $5 billion; what liquidity crisis?

Mon Mar 31, 2008



By Sarah Wood

One of the dangerous truisms about liquidity is that when you need it most, it is in least supply. Unless, of course, you're in the hedge fund business, which is proving once again what a charmed place it is to be.

The latest example of this is an enormous $5 billion private equity fund that Lehman Brothers has crafted to pool minority stakes in about a dozen $5 billion-plus hedge funds. Lehman is expected to put up 15% to 25% of the capital itself and is now seeking to raise the rest from institutions around the world.

The Lehman fund is one of at least four in development or recently launched to help big hedge funds become major ones - assistance that in the fast-consolidating hedge fund world of the future, could mean the difference between survival and extinction. (See related story, p. 32.) The other pooled funds...

ISSN: 2151-1845 / CDC10004H

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