BofA to spin off $5 billion private equity unit

Share this
inShare
Digg
Email
Print
Related News
Goldman profit drops, regulations cloud outlook
6:51pm EDT
Special Report: In the wild west Balkans, a banker's tale
10:49am EDT
Citi profit sags as revenue shrinks, expenses grow
Mon, Apr 18 2011
Wall Street rises on economic data but minefields loom
Fri, Apr 15 2011
UPDATE 9-BofA profit drops as foreclosure delays hurt bank
Fri, Apr 15 2011
Analysis & Opinion
Regulatory arbitrage of the day, Citigroup edition
Long Asia on the inflation blame game
Related Topics
Deals »
Global Deals Data 2011 Q1 »
Inflows Outflows »
Stocks

Bank of America Corp
BAC.N
$12.34
-0.08-0.64%
04/19/2011

By Joe Rauch
CHARLOTTE, North Carolina | Tue Apr 19, 2011 9:35pm EDT
(Reuters) - Bank of America Corp (BAC.N) plans to spin off its last large private equity fund, with more than $5 billion in assets, and has no plans to make new private equity investments, a company spokesman said on Tuesday.

Bank of America, the largest U.S. bank by assets, will spin off BAML Capital Partners into its own unnamed firm.

The firm would then manage the bank's private equity assets for a fee -- winding those positions down over time -- and could begin accepting outside investors.

The assets will remain on BofA's balance sheet until they are wound down.

Company spokesman Jerry Dubrowski said BofA determined the business was "not strategically critical to customers and our clients" and the decision was made to spin off the unit.

Dubrowski said the head of the new firm had not yet been announced, and it was not immediately clear the number of employees that would move to the new firm.

The spin-off is the latest in a series of moves by the bank to comply with the Volcker Rule, a part of the financial regulatory overhaul law passed in 2010 that limits proprietary trading, or investments by banks using their own capital. It also fits with Chief Executive Brian Moynihan's efforts to sell off extraneous business units.

In 2010, the bank spun off Banc of America Capital Investors, a $1.4 billion private equity group to form Ridgemont Equity Partners, under a similar structure.

(Reporting by Joe Rauch; Editing by Tim Dobbyn)