Lehman asks private equity firms to remain in bid -FT

LONDON (Reuters) - Lehman Brothers LEH.N has asked three private equity firms to remain in the bidding for its asset management arm even though the investment bank has yet decide on whether to sell the unit, the Financial Times reported.

Kohlberg Kravis Roberts, Hellman & Friedman and Bain Capital have been told by Lehman that their bids are high enough to go forward, the paper said, citing people familiar to the matter.

Although Lehman has not reached a decision, it has been soliciting bids from private equity firms to gauge interest in its asset management arm, which includes Neuberger Berman, the fund manager, and minority stakes in several hedge funds.

Both Lehman Brothers and Kohlberg Kravis were not immediately available for comments.

Lehman is trying to assuage investors concerned about its $60 billion (32.5 billion pounds) of mortgage assets as the global credit crisis heads into its second year.

The bank has looked at selling at least a part of its asset management unit to private equity firms, and is looking at selling commercial real estate assets.

Lehman, the fourth-largest U.S. investment bank, has taken a $7 billion hit from credit-related write-downs and losses since the start of the global crisis.

The bank, among the biggest dealers of mortgage-backed securities on Wall Street, is coping with the aftermath of the mortgage meltdown and must also reinvent itself for a world where bonds backed by home loans represent a smaller, less profitable business.