The bank is understood to be the only investor in Ridgemont Equity Partners to date, in a move which is almost certainly directly linked to Washington’s recent overhaul of financial regulation.
“The decision to launch Ridgemont Equity Partners was a collaborative one, as we agreed that a new independent platform is well suited to the composition of our group and our strategy going forward,” said Ridgemont partner Travis Hain in a statement yesterday.
The firm will manage around $1.5bn (£941m) of assets, representing approximately 23 per cent of Bank of America’s private equity portfolio. It will focus on middle market buyout and growth equity investments of $25m to $100m.
The 19 investment professionals moving to Ridgemont have invested $3bn in 140 companies since 1993.
The new so-called Volcker Rule, introduced in the States last month, prevents banks from trading on their own account or owning or sponsoring hedge funds and private equity businesses.