Even after Lehman Brothers filed for bankruptcy protection on Sunday, the investment banks' asset management business was being shopped Monday to a host of interested parties.

Along those lines, a still-lucrative part of Lehman that could also help attract buyers is its indexing products group. The unit, which began some 35 years ago, maintains and publishes thousands of indexes that are used around the world by both active and passive money managers to track different markets.

According to Lehman's estimates, the group had a total of roughly $6.9 trillion benchmarked to those products by the end of last year.

In particular, Lehman has become known for its expertise in covering fixed-income markets. It was the first to publish a total returns bond index, and the Lehman Brothers Aggregate U.S. Bond index remains the de facto standard for broad indicators of fixed-income markets for advisors and managers domestically.

With such a strong brand, some market observers say they're more convinced that Lehman will be able to find an outside buyer for its indexing group than other parts of the company. That includes Neuberger Berman,  its mutual funds management firm.

Leading suitors being discussed for Lehman's indexing venture include financial giants Citigroup and Credit Suisse. Both are already big into fixed-income index services. And each has aggressively pursued Lehman's assets lead with bond managers.

"Everyone uses their bond indexes. You'd have to assume that (group) would be a pretty attractive asset to come out of bankruptcy or attract another party if Lehman decides to sell off parts of its business," said Raymond Benton, a Denver-based advisor.

The indexing group at Lehman is considered part of the company's fixed-income research unit. That's separate from the firm's asset management group and part of the broker-dealer side of the business. On Monday, The Wall Street Journal reported that several rivals could be interested in buying different parts of Lehman. Specifically, it pointed to the asset management arm. The report listed Bain Capital, Hellman & Friedman and Clayton Dubilier & Rice as possible suitors.

What's In A Name ...

Portfolio managers at Compass Efficient Model Portfolios aren't too concerned about the fate of Lehman's indexing services, though. The Nashville, Tenn.-based money manager oversees about $3 billion in assets for advisors and institutions around the country.

"To us, having Lehman on the name of an index is similar to walking into a stadium with a company's name on the outside," said Steve Hammers, chief investment officer at Compass. "Lehman doesn't own every bond in their indexes. So this is more of a marketing and services story than anything."

Big institutions pay Lehman to get data to put together and keep their bond indexes running, he noted. "If Standard & Poor's goes under, it's not going to impact the companies in the S&P 500," said Hammers. "It might affect the market, but Lehman's indexing group is still going to be a valuable commodity."

He points out that while stock indexes have been plummeting this year, fixed-income benchmarks tied to Lehman's most popular products have largely been in the black. "Lehman's indexing group is a long-standing name in the industry," Hammers said. "As Lehman tries to liquidate its assets, their brand is still going to be worth something."

He thinks a natural suitor would be Citigroup. "We have 2,200 indexes in our database, and they're the largest provider of fixed-income benchmarks," Hammers said. "So it would make a lot of sense for Citigroup to really take advantage of this current situation."

Lehman used to be the biggest provider in fixed income, he says. But since the early 1980s, when Citigroup started publishing its U.S. fixed-income indexes, the firm has come on strong. "Lehman had a better than 10-year jump on Citigroup in terms of getting into the U.S. bond indexing market," Hammers said. "But Citigroup now has 380 major U.S. fixed-income benchmarks that we're aware of through our various subscriber services. So it's fair to say that Citigroup has really built out their fixed-income indexing operation."

But he says that Lehman still has the advantage of being able to attract monster assets and fees from a smaller number of popular long-standing industry benchmarks. That gives the indexing pioneer a large asset base that could prove enticing to possible buyers.

"In sheer numbers of indexes, Citigroup actually has built a bigger presence in the bond world," Hammers said.

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