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BofA to spin off $5 bln private equity unit
Tuesday, April 19, 2011 6:55PM
Reuters

* BofA to spin off primary private equity unit

* Division manages $5 bln in assets

* Bank will keep assets on balance sheet until wound down

By Joe Rauch

CHARLOTTE, N.C., April 19 (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)


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