Bank of America Corp. is planning to spin off its private equity business by the end of the second quarter.
The Charlotte, N.C. bank inherited the private equity business, BAML Capital Partners, when it acquired the brokerage Merrill Lynch in 2008. BAML Capital Partners, which manages $5 billion in assets, will be spun off into a separate company that will be run by its existing management.
Formerly known as Merrill Lynch Global Private Equity, the business invests in growing companies and takes part in leveraged buyouts. Bank of America will continue to own the portfolio but no new investments will be made with the bank's money.
Bank of America has been winding down business units that use the bank's money to make investments. The move has been in response to the "Volcker rule," named after the former Federal Reserve Chairman Paul Volcker, who authored a regulation that limits how much banks can bet with their own capital.