Lehman Brothers has spun out its European mezzanine business Lehman Brothers European Mezzanine Partners, to Neovara, a new credit asset manager established by management team of Lehman Brothers European Mezzanine Partners.

Neovara will advise and manage the sale of assets in the EUR800m Lehman Brothers European Mezzanine Fund.

Reportedly, the spin off has been approved by the institutional investors, but the retail investors are yet be to approve the move.

Lehman Brothers might retain substantial stake in the fund along with the other investors.

Julian Entwisle, Nathalie Romang and Joris Fletcher will serve as managing partners of Neovara, and will be joined by Richard Holden and Jason Howard as partners.

Mr Entwisle said: “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.”

Since its collapse in 2008, Lehman Brothers has been selling off parts of its investment management business, which include the Neuberger Berman asset management unit and the Trilantic Capital private equity arm.