Lehman Brothers Ponders Sale of Investment Management Unit

Today, CNBC reported that Lehman Brothers Holdings Inc may sell it’s investment management business, including private equity and hedge fund holding as well as the Neuberger Berman money management business.

The announcement comes as a result of the bank’s need to raise funds to cover Lehman’s recent $2.8 billion loss, confirmation that the sector’s issues are still unfolding. With its first loss since 1994, the firm is forced to raise new capital and considers sale of the investment management assets to provide the needed liquidity.

Lehman is not the only one in need of cash. On July 29, Merrill Lynch announced a $5.8 billion third quarter writedown related to the unloading of risky debt investments. The firm’s writedown follows an astounding $19.2 billion loss for 2007.

Will these firms go the way of Bear Stearns? Do you want your assets held at a firm in dire need of cash to stay afloat? There are many other options. A better one is to work with a financially stable, independent firm that doesn’t need to raise billions or sell key assets to survive.