Lehman Brothers has agreed its third significant asset sale since filing for bankruptcy, announcing the disposal of its investment management unit to Bain Capital and Hellman & Friedman, the private equity firms, for $2.15 billion (£1.19 billion).

The deal includes the Neuberger Berman asset management division, which oversees about $130 billion of investments, in addition to a portion of Lehman’s private equity and property investment group.

The sale comes after Lehman filed for bankruptcy on September 15 in the wake of huge losses on sub-prime mortgage-related investments. Shortly before the bankruptcy, analysts were valuing the investment management unit at as much as $10 billion.

Lehman is very vulnerable and has been scrambling to sell off the healthy parts of its business since the bankruptcy filing. The group sold its main North American business to Barclays for $1.7 billion. Nomura, the Japanese brokerage, acquired its operations in Europe, the Middle East and Asia.

George Walker, the former head of investment at Lehman, will become chief executive of the newly renamed Neuberger Investment Management. He said: “We are excited and energised about what this means for our clients and our employees.”

Founded in 1939 by Roy Neuberger and Robert Berman, the business has specialised in managing money for wealthy clients. Mr Neuberger is 105. In the 1950s, it was among the first to offer customers mutual funds that did not charge transaction fees.

Richard Fuld, Lehman’s chief executive, bought Neuberger in 2003 for $3.2 billion. The group originally put up for sale a 55 per cent stake in the investment management unit but changed its mind and sold the whole business in the light of its bankruptcy. Mr Fuld had hoped to hold on to a stake in the unit as part of his failed plan to keep the 158-year-old business afloat.

Lehman’s $35 billion private equity and property business, which manages close to 40 funds and is led by Michael Odrich, a 22-year Lehman veteran, is also included in the deal. Mr Odrich will join the new company, as will Tony Tutrone, head of the private funds investment group.

The sale does not include Lehman’s private investment management division, which is being sold to Barclays in a separate transaction.

Other groups involved in the auction of the investment management unit included the private equity businesses Kohlberg Kravis Roberts (KKR), Blackstone, Carlyle and Clayton Dubilier & Rice.

Hellman & Friedman’s previous financial services investments include the £500 million acquisition of Gartmore Investment Management, the fund manager, in 2006. Bain Capital’s previous financial services transactions include the acquisition of Datek Online, the internet broker.

Lehman must get approval for the sale to the buyout firms in a federal bankruptcy court, where Judge James Peck will determine whether the auction drew the best possible price.

The purchase reunites Warren Hellman, Hellman & Friedman’s chairman and co-founder, with his old firm. Mr Friedman, a former Lehman president, left Lehman in 1977 and four years later moved to San Francisco, founding his business with Tully Friedman in 1984.

Michael Holland, the founder of Holland & Co, which manages about $4 billion, said: “On the face of it . . . it [Hellman’s takeover] looks to be an attractive, if not a bargain price.”

Private equity groups typically finance about two thirds of their acquisitions with borrowings. However, given the perilious state of the credit markets and the sensitivities surrounding debt, the two private equity firms agreed to finance the deal entirely with cash from their own investment funds. Neuberger’s senior asset managers will also have an undisclosed but significant stake in the group, as part of an incentive programme designed to help retain staff.

Joe Amato will head Neuberger Berman, the group’s largest operating unit, an announcement said.

Phil Loughlin, a managing director at Bain Capital, said he believed that over the long term there would be a “great deal of value and unleashed potential in this newly independent company”.

Bain and Hellman & Friedman would be equal partners in the new company.

Diary dates

September 9: Fears mount over the future of Lehman Brothers as its shares plummet to their lowest level on Wall Street in more than a decade

September 14: Negotiations with Federal Reserve and bank chiefs fail after three days, leaving Lehman on the brink of collapse. Barclays, which was the front-runner to buy the bank, walks after failing to obtain guarantees over Lehman’s financial commitments

September 15: Lehman files for bankruptcy. World stock markets plunge

September 17: Barclays snaps up Lehman’s US operations for $1.75 billion

September 19: Lehman’s UK pension scheme is bailed out by Pension Protection Fund

September 21: Lehman’s UK staff voice anger at the group’s practice of withdrawing funds to New York at the end of each day, which left coffers at the European business empty

September 23: Nomura agrees to pay $2 for Lehman’s London equity and investment bank units

September 26: Nomura misses deadline to buy Lehman’s fixed income division in London

September 29: Lehman sells investment management unit to Bain Capital and Hellman & Friedman for $2.15 billion

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