New York, July 17: Lehman Brothers is set to acquire the high-net-worth brokerage business of SG Cowen, a unit of French bank Societe Generale SA, according to people familiar with the matter. Lehman senior management has agreed to buy the brokerage unit for about $50 million in cash, according to people close to the matter. Though both sides are continuing to negotiate small details, a deal could be out as early as Monday. Lehman is looking to pick up as many as 140 brokers and a couple of branch offices as part of the deal.
Lehman has been building its brokerage business and has about 325 brokers, or "investment representatives," generating average annual revenue of about $2 million. The firm, which focuses on wealthy individuals, plans to continue expanding by adding several hundred brokers over the next few years.
An acquisition of SG Cowen's brokerage arm would give Lehman an additional $10 billion in assets under management. SG Cowen's brokerage team would offer a strategic fit, people familiar with the firm said, since SG Cowen's business also focuses on wealthy customers.
Through much of its history, Lehman has focused on marketing its stock and bond offerings to institutional investors. But last year, the Wall Street investment bank teamed up with Fidelity Investments, the nation's largest mutual-fund firm, to form an alliance that gave Lehman a presence in, and access to, the retail and fast-growing online investment markets. Fidelity, in turn, would market hman's investment products, including IPOsearch, to its individual investors.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.