Sheldon Trainor, Merrill Lynch’s head of Asia investment banking and one of its key rainmakers, will leave his role to set up his own private equity fund.
Trainor will stay on as an adviser to Bank of America, helping his former investment banking colleagues originate deals. He will retain a desk at the new firm and carry a ‘Bank of America Merrill’ business card as well as receiving a salary for his part-time role.
His move comes in the wake of Merrill Lynch being swallowed by Bank of America in September. But it is understood that Trainor has been keen to set up his own venture for many months.
Trainor is the latest in a long line of very senior bankers to leave Merrill Lynch following the Bank of America’s rescue of the Wall Street bank, which completed this month. Other top people who have resigned include Merrill Lynch’s global number two Greg Fleming and global head of financial advisory, Robert McCann.
Damian Chunilal, who was head of Pacific Rim investment banking, also left Merrill in November.
Trainor’s private equity fund will focus on opportunities to buy distressed businesses in the region. Industry sources said he has had no problem attracting high net worth investors to his fund already. Trainor was unavailable for comment.
Financial experts believe plunging stock markets and the fallout from the debt crisis means many struggling Asian businesses will be forced to sell out to new owners. But large investment banks are greatly reducing their principal investment businesses all over the world. Due to the credit crisis, their cost of capital has become too high to make private equity and distressed debt investing profitable.
But some private investors will be happy to commit their equity to small distressed funds for a much longer time period than the average bulge bracket bank, which must report to shareholders quarterly and likes fast investment returns.
Lehman Brothers’ former Asian head of special situations, Edwin Wong, also left the bank shortly after its rescue by Nomura to set up his own fund.
A Merrill Lynch spokesman declined to comment.