Capital One To Ditch Hedge Fund, Private Equity Investments

Nov 29 2011 | 11:19am ET

Capital One Financial isn't sweating the Volcker rule.

The bank will sell or restructure some $150 million in hedge fund and private equity investments to come into compliance with the new regulation, which will severely restrict banks from investing in or owning alternative investment funds.

Unlike many banks, McLean, Va.-based Capital One doesn't have specialist hedge fund or private equity units. The $150 million in investments came through acquisitions of other lenders.

In a letter to the Securities and Exchange Commission in July, made public yesterday, Capital One said that complying with the Volcker rule will not have a "material affect."

"We expect to be required under the Volcker rule to dispose of certain investments in private equity or hedge funds acquired with our past bank acquisitions," Capital One told the SEC, spurred by an SEC inquiry earlier in July. "We are considering options to exit or restructure these investments."

The SEC said told Capital One in October that it had completed the review that led to the July 19 letter, asking the bank about how it expected the Volcker rule to affect it.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...