BANK of America has spun off part of its mid-market private equity arm, the first US bank to do so since the financial reform bill was passed in the States last month.
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.