Bank of America shuts pvt equity arm

At a time when private equity investors across the globe are making a beeline for investing in Indian corporations, Banc of America Equity Partners - the private equity investment arm of Bank of America, and the largest private equity portfolio managers in the world - has closed down its Indian operations.

Surprised with the sudden move, analysts attributed the closure to possible accumulation of bad assets.

When contacted, Vishwavir Ahuja, managing director and CEO of Bank of America, declined to comment on the development, saying the bank and its private equity wing always functioned independent of each other.

However, he admitted that the bank's private equity arm had ceased to have a presence in India.

Set up in 1997, the India operations were managed by a handful of employees. The subsidiary kicked off its business with a secondary market deal, investing in Wockhardt.

At a later stage, it picked up stakes in DSQ Software and Himachal Futuristic. At one point, BAEP and Credit Suisse First Boston held a 16.50 per cent stake in DSQ Software. It also held a 2 per cent stake in Cadila Healthcare.

Some of the investment decisions, sources close to the organisation said, did not yield the right results.

"The decision to close down its operations was taken a few months back, and some of the employees were asked to go," they added. At one point of time, the pure private equity player was running a book of over Rs 200 crore (Rs 2 billion).

BAEP, which globally manages a committed capital of over $6.3 billion, had set up its Indian subsidiary to provide development capital to companies in high-growth industries.

Globally, it is a diversified private equity investor, providing equity capital to companies at all stages of the business cycle - from starting up to buyout.