Lehman Brothers has completed the spin-out of its European mezzanine business, Lehman Brothers European Mezzanine Partners, to Neovara, a new independent credit asset manager established by Lehman Brothers European Mezzanine Partners’ management team.
Neovara will advise on the realization of the EUR800m Lehman Brothers European Mezzanine Fund.
The spin-out has received unanimous support from the fund’s institutional investors, and Neovara is now assuming the management and control of their investment vehicles. The consent process for retail investors is ongoing.
Neovara has been established by the founders of Lehman Brothers European Mezzanine Partners, who have worked together since 2002 and were among the pioneers in developing the European mezzanine market.
Julian Entwisle (pictured), Nathalie Romang and Joris Fletcher will serve as managing partners of Neovara, and will be joined by Richard Holden and Jason Howard as partners.
The senior team is supported by three further investment professionals and a full-service fund management platform.
Alongside the continued management of Lehman Brothers European Mezzanine Partners, Neovara intends to build a mezzanine and private credit management business, which will continue the team’s strategy of investing in European private equity transactions. Neovara sees substantial opportunities in this space over the coming years.
“We feel that an active but more rational private equity market over the next few years will offer extremely attractive opportunities for mezzanine and related private credit and equity investments,” says Entwisle. “We are hugely excited about the opportunity of being able to act independently in addressing this market.”
The spin-out to Neovara was agreed after an extensive due diligence process conducted by Lehman Brothers.
Lehman Brothers is retaining its substantial interest in the fund alongside other investors. The company has now successfully sold or spun-off most of its investment management businesses, including its Neuberger Berman division and, in separate transactions, its venture capital, merchant banking, structured credit and real estate mezzanine businesses.
Neovara has been advised by Duncan Woollard of legal firm SJ Berwin with respect to the spin-out.
