Lehman Brothers Asset Management has been awarded a mandate of EUR16 billion by the Free State of Saxony in consultation with Landesbank Baden-Wrttemberg (LBBW) and a group of German banks, to manage a portfolio of structured finance securities formerly owned by SachsenLB, a German regional bank. Lehman Brothers Asset Management won the mandate in an open pitch process which included several other investment firms.
LBBW acquired SachsenLB in January 2008. As part of the agreement with the owners, former investments will be transferred off balance sheet to a special purpose vehicle, with a risk shield being provided by the Free State of Saxony. This portfolio mainly consists of US and European AAA and AA rated structured finance securities.
“Lehman Brothers Asset Management’s role will be to manage the portfolio and, over time, to reduce the exposure of the Free State of Saxony and LBBW to this portfolio of risks,” says Perry Hoffmeister, head of investment management, Europe and Middle East, Lehman Brothers.