Thain departure leaves BoA’s private equity arm in limbo

The fate of the bank’s recently created private equity and global investment management division is unknown as the division’s first leader, Brian Moynihan, takes the reins of the merged company’s global banking and global wealth and investment management division.

Brian Moynihan, former head of Bank of America’s recently created private equity and global investment management division, has taken over the bank’s global banking and global wealth and investment management division.

Moynihan is replacing John Thain, former chief executive of Merrill Lynch, who became president of the wealth and investment management division after the companies’ merger was announced in October. Thain left the company Thursday amid criticism and a $15 billion loss at Merrill despite assurances to the contrary, according to media reports.

Brian Moynihan

The future of the merged company’s private equity and global investment management division, which was created in October, is uncertain. Bank of America did not return a call for comment.

Moynihan was appointed to the new role in October after Bank of America announced in September it would buy Merrill Lynch in a $50 billion all-stock transaction.  Since then, Bank of America’s stock has nosedived from $26.55 the day the deal was announced to $5.76 at the close of the market on Thursday.

Moynihan was appointed general counsel of the company in December, replacing Timothy Mayopoulos. At the time of his appointment to general council, the bank said Moynihan’s other responsibilities would be covered by other executives.

Bank of America’s private equity business is broken into three divisions: Banc of America Capital Access Funds, a fund of funds; Banc of America Capital Investors, a private equity and mezzanine partnership that provides capital for growth financing, buyouts and recapitalisations; and Banc of America Strategic Investments Group, which originates, structures and executes direct equity investments, private equity funds and hedge funds.

The bank’s private equity business manages about $7.4 billion in private equity capital on behalf of Bank of America, with about half in direct investments and half invested through limited partnership interests in unaffiliated funds.

Merrill Lynch also has a private equity arm, thought to be worth between $5 billion and $6 billion. Merrill Lynch Private Equity has been raising a $6 billion fund, according to a Wall Street Journal article published in August.

Merrill’s former captive private equity arm, Mercury Private Equity, spun out from the business in 2000 and was renamed HgCapital.