Lehman in London hedge move

LEHMAN Brothers has launched a London-based hedge fund offshoot with the ambitious target of raising several billion dollars in client funds, possibly by snapping up smaller hedge fund boutiques.

The US investment bank's global strategist Joe Rooney will head one of the initial funds run by the new venture, Edgeworth Capital. The entire venture will be headed by Wes Paul, a former senior fund manager with JP Morgan.

Paul said the hedge fund industry was 'ripe for consolidation' with almost 6,000 participants. Edgeworth plans to target institutional investors, which will be asked to put in a minimum of $5m (£3.45m), and rich individuals ($100,000).

Lehman will hold more than 50% of Edgeworth, while the initial seven partners will own a sizeable minority and have pledged to invest several million dollars in its funds. The first two funds are a global macro and micro fund and a pan-European equity fund. Both will have the flexibility to go short.