Three private equity firms, Kohlberg Kravis Roberts, Hellman & Friedman and Bain Capital were told by Lehman that they remained in the bidding for its asset management arm.

The assset management unit includes Neuberger Berman, the fund manager, and minority stakes in several hedge funds.

KKR, Hellman and Bain have been told by Lehman that their bids are high enough to go forward. Blackstone and Carlyle have been eliminated from the informal auction. Blackstone had little interest in Lehmanâ??s hedge fund stakes and was worried about the costs associated with keeping Neuberger managers from leaving, according to people close to the matter.

The potential sale of Lehman's asset-management arm is part of an effort to raise cash before its earnings report next month. Another option could be the sale of its commercial real estate portfolio.