For the second time in three months, a private equity team is splitting from a big U.S. bank to become an independent business with the former parent company's backing. The spin-offs from Bank of America and Wells Fargo reportedly have no connection with the Volcker Rule, and both banks maintain large PE portfolios post-split.
At the end of June, about 20 staffers from Banc of America Capital Investors led by Travis Hain will separate to form a new company whose name is not yet announced. They'll manage about $1.4 billion in PE investments for BofA while also seeking money from outside investors, the Charlotte Observer reports. But those assets make up just a fraction of the roughly $6 billion portfolio of a PE operation called BAML Capital Partners, the remainder of which BofA will keep.
BofA spokesman Jerry Dubrowski says the move isn't related to an Obama administration proposal called the Volcker Rule that would ban banks from running alternative investment or proprietary trading. The bank's global principal investments group, run by former Merrill Lynch executive Jim Forbes, had $13.4 billion in investments at the end of March.
In March, Wachovia Capital Partners and its 16 investment professionals split off from Wells Fargo to form an independent firm, Pamlico Capital. Pamlico's managing partners are Scott Perper, Watts Hamrick and <b.Eric Eubank. The firm manages more than $2 billion on behalf of Wells Fargo and other outside investors. It plans to move to a new uptown Charlotte office this summer, according to the Observer.
San Francisco-based Wells Fargo maintains other PE and venture capital units in Minneapolis and Palo Alto, Calif.