Lehman Brothers will acquire 20% of Ospraie Management LP, a firm that operates hedge funds focused on commodities and basic industries. The deal shows narrowing ties between brokerages and hedge fund industry. The value of the deal is believed to be at $80 million or lower. The return in Ospraie’s main funds was at 20% in 2004, and the firm manages over $2 billion. Lehman clients will not be able to get into Ospraie’s existing funds, but will have privileged access to the future entities. The plans for the future months include the opening of a long-only commodity fund.

"We have limited our capital under management to ensure that our funds did not outgrow our capacity to manage them," Ospraie’s founder Dwight Anderson said in a letter to investors sent April 18.

Mr. Anderson also said that Lehman will further Ospraie’s expansion "with selected marketing, operations, technology and product development services."

Mr. Anderson is an experienced commodities trader who has won a reputation for expertise in this area that is regarded as very promising on surging demand from China and India, and the disastrous returns in some of the equity sectors.