Private Equity - Lehman Brothers

December - 2007

http://www.lehman.com/im/pe/

Private Equity

Lehman Brothers has been an active and successful private equity investor since 1984. Since then, Lehman Brothers' investment partnerships have managed a number of private equity portfolios, with a significant amount of the Firm's and employees' capital invested alongside that of our clients.

Lehman Brothers and its employees typically comprise a significant amount of the capital committed to each of its private equity funds. Lehman Brothers' direct financial commitments to its private equity funds help align the Firm's interest with those of its limited partners.



Our dedicated Private Equity groups are enhanced by the breadth and depth of Lehman Brothers' global presence and expertise across a wide range of products, industries and geographies. Lehman Brothers creates funds and invests in asset classes where the Firm has strong capabilities, proprietary deal flow and an excellent reputation, to offer uniquely attractive investment opportunities for institutional and individual investors.

Currently, Lehman Brothers Private Equity invests in six main asset classes: Merchant Banking, Venture Capital, Real Estate, Credit Related Investments, Infrastructure and Private Fund Investments.

Assets Under Management
When Lehman Brothers entered the private equity business in 1984, it was one of the first investment banks to do so. The Private Equity Department currently manages a number of private equity portfolios, and has more than $20 billion in assets under management.

Areas within PE

- Merchant Banking
- Venture Capital
- Real Estate
- Credit Related Investments
- Private Fund Investments
- Infrastructure Investments
- Private Fund Marketing Group


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The senior managers of the Private Equity Department.

Michael J. Odrich
Managing Director
Global Head of Private Equity

Vittorio Pignatti
Managing Director
Head of Private Equity, Europe


Christopher Manning
Managing Director
Head of Investment Management and Private Equity, Asia-Pacific


Ruth E. Horowitz
Managing Director
Chief Administrative Officer

Private Fund Marketing Group

Christopher D. Kirsten
Managing Director
Head of Private Fund Marketing Group

Merchant Banking

Charles Ayres
Managing Director
Head of Merchant Banking

Venture Capital

Thomas E. Banahan
Managing Director
Head of Venture Capital

Real Estate

Mark A. Walsh
Managing Director
Head of the Global Real Estate Group

Brett Bossung
Managing Director
Co-Head of the Real Estate Private Equity Group

Mark H. Newman
Managing Director
Co-Head and Chief Investment Officer of the Real Estate Private Equity Group


Private Fund Investments
Anthony D. Tutrone
Managing Director
Head of Private Fund Investments


Credit Related Investments

Goran V. Puljic
Managing Director
Head of CDO Opportunity Investments

Julian N. Entwisle
Managing Director
Head of European Mezzanine Investments

Michael P. Guarnieri
Managing Director
Head of Loan Opportunity Investments

Robert D. Redmond
Managing Director

Infrastructure
Michael J. Cannon
Managing Director
Head of MLP Opportunity Investments


Emil Henry
Managing Director

http://www.lehman.com/im/pe/dept_mgmt.htm
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Merchant Banking

The Lehman Brothers Merchant Banking group manages funds that seek significant long-term capital appreciation through direct investments in established operating companies in partnership with management. The funds invest in companies with sound business fundamentals, proven operating teams and a compelling business strategy or vision. Lehman Brothers Merchant Banking prefers to retain control over critical governance decisions in the companies in which it invests, regardless of ownership percentages, through board representation or ownership rights.

The group was established in 1986 to achieve significant long-term capital appreciation through investments in private equity and equity-linked securities. Today, the team has over 35 dedicated investment professionals with offices in New York, London and Hong Kong. Since 1986, Lehman Brothers Merchant Banking has raised and managed four institutional funds and several employee investment vehicles, with total committed capital in excess of $8.0 billion.

Lehman Brothers Merchant Banking Partners IV is the Merchant Banking group's current fund. The fund closed successfully in June 2007 with over $3.3 billion of capital commitments from institutions, high net worth individual investors, and Lehman Brothers, its affiliates and employees.

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Venture Capital

The Venture Capital Group manages funds that focus on making investments in companies capable of turning innovative technology and management solutions into successful businesses, primarily in the technology and healthcare industries. The Group's primary investment focus is on mid- to later-stage privately held venture companies, as well as growth investments in more mature operating businesses. We will make opportunistic investments in earlier stage companies with limited technology development risk.

Lehman Brothers launched its formal venture capital investment program in 1995. Lehman Brothers' Venture Capital has approximately $1.1 billion in total committed capital to date, with $717 million invested to date in 84 portfolio companies across a diverse range of industries and geographies.

The Venture Capital Group maintains offices in New York and Silicon Valley.

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Real Estate

The Real Estate Private Equity Group is a full-service real estate merchant banking business which operates two opportunistic equity funds aggregating $4.0 billion of equity capital and one mezzanine investment fund aggregating $1.1 billion of equity capital. The funds are an extension of Lehman Brothers' global real estate franchise which has a long and successful track record advising, underwriting and investing and has participated in over $300 billion of real estate transactions since 2000. The funds are invested and managed by a team of over 80 professionals in North America, Europe and Asia-Pacific under the leadership of managing directors and group heads, Brett Bossung and Mark H. Newman.

Lehman Brothers' inaugural real estate private equity fund, Lehman Brothers Real Estate Partners (LBREP I), closed in 2001 with over $1.6 billion in aggregate commitments and is now fully invested. Lehman Brothers Real Estate Partners II (LBREP II), a $2.4 billion fund, closed in 2005, makes direct private equity investments in properties, real estate companies and service businesses ancillary to the real estate industry in North America, Europe and Asia-Pacific.

The group's inaugural $1.1 billion mezzanine investment vehicle, Lehman Brothers Real Estate Mezzanine Partners (LBREM), closed in August 2005. Headed by Yon Cho, LBREM leverages the proprietary deal flow and origination volume of Lehman Brothers' global real estate business to invest in a broad range of mezzanine debt and other high yielding investments in real estate, primarily in the United States.

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Credit Related Investments

Our Private Equity Business includes two credit related investment activities: European mezzanine debt and collateralized debt obligations (CDOs). These funds invest in securities with equity-like returns and attractive risk/return characteristics.

The European Mezzanine Fund leverages Lehman Brothers' preeminent fixed income franchise to invest in privately negotiated mezzanine debt opportunities in Europe. The Fund invests in established operating companies with dominant market positions, unique franchises, sound business fundamentals, and strong management teams.

The CDO Opportunity Fund invests in collateralized debt obligations, instruments created when asset-backed structuring technology is applied to a portfolio of credit exposure, such as bank loans or bonds. The Fund seeks to combine the credit market expertise and analytics of the Firm's fixed income franchise with the investment process and client relationships of the Private Equity business to seek current income and substantial total return performance.

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Private Fund Investments

Private Fund Investments is responsible for the Firm's private equity fund of funds, secondary investment and co-investment vehicles. The group includes the Fund of Funds group, Secondary Funds group and Co-Investments group.

The Fund of Funds group pioneered private equity fund-of-funds investing in the early 1980s. The Fund of Funds group has committed in excess of $2.2 billion to more than 270 private equity funds, which in turn have made over 7,000 investments into underlying portfolio companies. The group has raised and managed 17 private equity funds since 1981 and is one of the only five federally registered investment advisors with more than 20 years' experience in the private equity sector. These investment opportunities are in third-party buyout, venture capital, mezzanine and special situation funds.

The Secondary Funds group seeks to purchase high quality, seasoned private equity fund portfolios from investors desiring liquidity prior to termination of those funds.

The Co-Investments group seeks to achieve favorable risk-adjusted returns through investing in transactions led by premier private equity firms.

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Infrastructure Investments

Lehman Brothers Private Equity is an active investor in the Infrastructure space, including transportation, utilities, natural resources, energy and communications. We leverage Lehman Brothers' strengths in these industries in sourcing and evaluating deal opportunities.

The MLP Opportunity Fund focuses primarily on U.S. investments in predominately energy master limited partnerships (MLPs). In addition, the fund opportunistically seeks global investment opportunities across the Infrastructure asset class.

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Private Fund Marketing Group

Lehman Brothers Private Equity has a dedicated team of Private Fund Marketing professionals focused exclusively on raising capital for private equity sponsors. Backed by the breadth of Lehman Brothers' distribution capabilities and expertise across industry sectors, the Private Fund Marketing Group is positioned to drive a comprehensive global marketing effort for its clients. By concentrating on a limited number of high-quality general partners, the Private Fund Marketing Group is able to give them access to a well-diversified, institutional global limited partner base. The Firm's Private Investment Management and Neuberger Berman investor base have also been active investors in Private Equity funds. The Group, with offices in New York, San Francisco, London and Tokyo, has been involved with over 20 fundraising transactions since 1998 including: Buyout, Venture Capital, Distressed, Mezzanine, Fund of Funds, Real Estate, Energy and Healthcare.

Profiles of the Principals of this group




Christopher D. Kirsten
Richard Anthony
Patrick S. Dunleavy
Neil Banta
John Linger


Christopher D. Kirsten
Global Head of Private Fund Marketing Group (New York)

Christopher D. Kirsten is a managing director, head of Lehman Brothers Private Equity's Private Fund Marketing Group and a member of the Lehman Brothers Private Equity Management Committee and Lehman Brothers Secondary Opportunities Fund Screening Committee. In this capacity, he is responsible for originating, developing and managing fundraising programs for private equity, venture capital, real estate and other private funds; capital goals are met by leveraging the Firm's extensive global institutional and high net worth relationships. Mr. Kirsten was previously a Director in Deutsche Bank's Private Equity Finance Group where he contributed to raising 15 funds with over $6 billion in capital. Prior, Mr. Kirsten spent 13 years in institutional fixed income sales and management with Nomura Securities International and Citicorp. Mr. Kirsten has founded and been a board member of several private companies. He currently holds a chartered financial analyst designation and is a member of the New York Society of Securities Analysts and the CFA Institute. Mr. Kirsten holds an M.B.A. from Columbia Business School and a B.A., cum laude, from the University of Pennsylvania.


Richard Anthony
European Head of Private Fund Marketing Group (London)
Richard Anthony is an executive director and European head of the Private Fund Marketing group. In this capacity, he is responsible for originating, developing and managing fundraising programs for private equity, venture capital, real estate and other European private funds. Mr. Anthony leverages significantly off Lehman Brothers' capital markets and investment management distribution effort to achieve capital goals. Mr. Anthony was previously an executive director in Lehman Brothers Fixed Income Division's Structured Solutions group responsible for the coverage of U.K. and Ireland. He developed and executed transactions across the full fixed income product range, as well as in the alternative asset management space. Prior to that, Mr. Anthony spent seven years in institutional fixed income derivative sales with Barclays Capital, Bear Stearns and J.P. Morgan. Mr. Anthony graduated with a B.Sc. (Hons) in management science from Loughborough University.




Patrick S. Dunleavy
Global Head of Origination Private Fund Marketing Group (New York)
Patrick S. Dunleavy is the global head of origination for the Private Fund Marketing Group and a managing director at Lehman Brothers. Mr. Dunleavy is responsible for originating, structuring and distributing private equity, venture capital, real estate and other alternative investment opportunities. Mr. Dunleavy joined the Firm in 2006 from Lazard, where he served as a managing director in the Private Fund Advisory Group. Prior to Lazard, Mr. Dunleavy spent more than 11 years working on a broad array of private equity assignments, holding various leadership positions at the Private Equity Group at Citigroup, the Private Equity Finance Group at Deutsche Banc Alex.Brown and the Private Placements Group at Cowen & Company. Mr. Dunleavy began his career as an attorney in the corporate finance and securities group of Willkie Farr & Gallagher. Mr. Dunleavy holds a B.A. from Fordham College and a J.D. from the Fordham University School of Law.




Neil Banta
Managing Director (New York)
Neil Banta is a managing director in the Private Fund Marketing group. He is responsible for sales of private investment opportunities to institutional investors in the U.S. and Canada. Prior to joining Lehman Brothers in 2007, Mr. Banta was a managing director in the Private Equity Funds group of Citigroup, where he participated in originating and selling more than 25 funds covering numerous strategies and geographies. Mr. Banta began his private equity career at Deutsche Bank Alex. Brown where he was a principal in the Private Equity Finance group. Before joining Deutsche Bank Alex. Brown, he spent 16 years in institutional fixed income sales at Morgan Stanley and Salomon Brothers. Mr. Banta holds a B.A. from Amherst College.



John Linger
Managing Director, Real Estate Private Equity (New York)
John Linger is a managing director of Lehman Brothers responsible for real estate capital raising. Prior to joining the Firm in 2007, Mr. Linger was a managing director with Cherokee Investment Partners LLC, a private equity real estate firm. During his tenure with Cherokee, he was directly responsible for raising a series of private funds totaling $2.3 billion of committed capital. Prior to joining Cherokee in 1997, Mr. Linger was a co-founder and partner of Atlantic-Pacific Capital, LLC, an investment banking firm focused on raising capital for alternative investment funds. Prior thereto, Mr. Linger was a principal of Benedetto Gartland & Greene, Inc., a New York-based investment banking firm. In addition, he was a senior associate in the Acquisition and Private Finance Group of Dean Witter Reynolds, Inc. Mr. Linger has 10 years of real estate experience and holds a B.A. from the University of Michigan and an M.B.A. from Columbia Business School.


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