UPDATE 2-Merrill's Asia property funds back in business -sources

miércoles 27 de enero de 2010 09:49 CET

* BofA decides not to sell Merrill property fund -sources

* Blackstone, Apollo walk away after negotiations -sources

* Raising money for new fund, hiring in Beijing -sources (Adds quotes from analyst and sources)

By George Chen and Saeed Azhar

HONG KONG/SINGAPORE, Jan 27 (Reuters) - Bank of America (BAC.N: Cotización) has dropped plans to exit Merrill Lynch's Asia property funds business and will instead help it raise new money, cashing in on a recovery in the real estate sector, sources said.

BofA was in talks with several private equity firms, including Blackstone Group (BX.N: Cotización) and Apollo Investment Management, to sell management rights to its $2.65 billion Asia Real Estate Opportunity Fund, which the bank regarded as a non-core business. [ID:nSIN485813]

Despite negotiations lasting more than six months, no deal was reached because of disagreements over financial terms and the complicated structure of Merrill's property funds business, the sources, who had direct knowledge of the matter, told Reuters on Wednesday.

BofA has hired people in Beijing to raise money for a new Asia-focused property fund, the sources said, adding China remains a focus for the Merrill funds.

In China, Merrill invested a few years ago in the development of the Beijing Yintai Centre, a top-end complex where the luxury hotel Park Hyatt Beijing is located on the historic Chang An Avenue. The investment has been a profitable one for Merrill, one of the sources said.   Continuación...