Blackstone, KKR eye Lehman assets: sources

By Elena Moya

LONDON (Reuters) - Blackstone Group LP and Kohlberg Kravis Roberts & Co are each looking to buy parts of Lehman's real estate and asset management units, sources familiar with the situation said on Friday, sparking a broad rebound in financial stocks.

The real estate unit of Lehman Brothers Holdings Inc, which includes property and some asset-backed securities, could be worth about $5 billion, the sources said.

Lehman shares jumped 5.3 percent after the Reuters report. That helped lift the S&P financial index, which had slipped earlier on Friday, by 1.8 percent.

"Lehman has been so shredded in terms of confidence that anything like this is something that can ignite a upward movement at any point," said Michael Holland, founder of money manager Holland & Co LLC.

Blackstone, KKR, and Lehman all declined to comment.

Lehman, the fourth-biggest U.S. investment bank, is under pressure to raise capital ahead of its earnings announcement this month. It has racked up crippling losses and still bears more than $60 billion of mortgage and commercial real estate exposure.

It has explored shedding assets, spinning off its money management arm and selling a significant stake to outside investors.

State-controlled Korea Development Bank (KDB) is in talks to acquire or invest in Lehman, but any deal was thrown into doubt amid financial market turmoil this week in South Korea. KDB has not given any details on the negotiations.