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BoA first to bow to Volcker Rule

  • John Bakie
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Bank of America (BoA) has spun out its private equity arm, making it the first to do so since the Volcker Rule was introduced in the US last month.

It is thought to be the only investor in the new company, Ridgemont Equity Partners.

The firm will manage around a quarter of BoA's private equity portfolio, worth $1.5bn. It will seek to make investments in mid-market buyouts valued at $25-100m.

The Volcker Rule, introduced in the US financial reform bill last month, prevents banks from owning or sponsoring private equity businesses and hedge funds.

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