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. Last Updated: 07/27/2016

$300 Million Fund Loses Lehman Brothers' Backing

Wall Street investment bankers Lehman Brothers have pulled out of a planned $300 million emerging-markets fund for the former Soviet Union after failing to agree on the terms of a loan guarantee with a U.S. government agency, a spokesman for the company said Friday.


Steven Fagin, a spokesman for Lehman Brothers, said by telephone from New York that the company had abandoned plans for the NIS Major Projects Fund, which had been designed to invest in the former Soviet Union's telecommunications, energy, transport and metals-processing sectors.


The fund was announced last June during Prime Minister Viktor Chernomyrdin's visit to the United States when the U.S. government's Overseas Private Investment Corporation pledged it would guarantee 75 percent of up to $300 million that Lehman Brothers was to raise from the private sector. Fagin gave no further details of the nature of the disagreement.


OPIC officials could not be contacted for comment Friday, and it was not clear whether the fund would go ahead under new management.


The U.S. government agency had hoped the fund would leverage up to 10 times its own value in private investment.