Columbia Management, Bank of America’s money management arm, will wind down a huge privately placed enhanced institutional cash fund to mitigate the negative impact on clients of continued weak market conditions. The fund, which sought to give institutional investors better returns than a money market strategy, has stopped taking new investments.
A handful of clients, accounting for about $21 billion invested in the strategy, agreed to move their holdings into separately managed accounts, for which Columbia will charge no fee for “a period of time,” Columbia spokesman Jon Goldstein said. Columbia executives expect most other investors, with combined assets of $12 billion, to stay in the fund as the securities it holds mature over the coming 24 months, said Mr. Goldstein.
