The private equity group Kohlberg Kravis Roberts (KKR), has emerged as favourite in the bidding for investment banker Lehman Brothers’ asset management business.

Other private equity groups understood to be considering the purchase of Neuberger Berman, the successful fund management business acquired by Lehman four years ago, include Blackstone and TPG, The Times reports.

Dick Fuld, Lehman Brothers chairman and chief executive, is considering a range of options for Lehman’s future, including the sale of Neuberger or the disposal of a stake in the entire bank.

Neither Lehman nor Wall Street believes a sale of the entire bank is an option because of the question mark over the way the bank's assets should be valued and the lack of buyers prepared to take on such a substantial business.

Further reading:

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Credit Suisse takes on Lehman's ousted CFO

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