Analysts are divided on whether or not Bank of America Corp. should retain its prime brokerage unit.
After rumors circulated that the hedge fund company Citadel Investment Group might be interested in buying the unit, Jeffrey Harte, an analyst at Sandler O'Neill & Partners LP, said, though prime brokerage is not a big business for the Charlotte company, its parent's size might give it an edge.
For bigger participants, like the wire houses, "it takes a lot of ongoing technology investments to stay on the cutting edge," he said.
However, another hedge fund analyst, who requested anonymity, said prime brokerage executives at B of A have left the company in recent years after seeing "the writing on the wall" that the unit is not a key strategic business for Bank of America.
Rumors of a possible deal swirled Wednesday when the New York Post said that Citadel, a $13.5 billion-asset company, had begun examining B of A's prime brokerage arm, though a source close to the matter, said Citadel is not negotiating a deal.
Katie Spring, a spokeswoman for Citadel, would not comment on the rumor. A Bank of America spokeswoman said it does not comment on market speculation.
