Bank of America Corp (NYSE: BAC) is working on selling $1.2 billion in commitments made to funds managed by Warburg Pincus LLC on the secondary market as part of an ongoing effort by the Charlotte-based bank to reduce its private equity exposure, according to reports from the Wall Street Journal and the New York Times, citing anonymous sources.
Earlier in the year, Bank of America Corp (NYSE: BAC) sold a $1.9 billion portfolio of interests in private equity funds to the secondary arm of French firm AXA Private Equity, including $200 million worth of commitments made to Warburg Pincus funds, made by Merrill Lynch before Bank of America purchased it.
A number other private equity commitments made by Bank of America Corp (NYSE: BAC)’s Merrill Lynch division are quietly being sold to other investors, the reports stated. New York-based Lexington Partners Inc. and sovereign wealth fund China Investment Corp. are expected to purchase about half of the bank’s $1.2 billion in Warburg Pincus commitments. The New York Times speculated that China Investment Corp could be a new limited partner for Warburg Pincus.
Currently, it’s not clear which funds of Warburg are being sold off, but the reports speculated that Bank of America Corp (NYSE: BAC) may be selling its stakes in Warburg Pincus Private Equity Fund IX LP, an $8 billion fund which closed in 2005, and Warburg Pincus Private Equity X LP, which closed at $15 billion in 2008.
Shares of Bank of America Corp (NYSE: BAC) traded up 3.44% hitting $13.82 during mid-day trading on Thursday.
