NEW YORK (HedgeWorld.com)–Stephan P. Vermut has resigned after eight years of leading the prime brokerage effort at Banc of America as president and chief executive.

Mr. Vermut was responsible for expanding the Banc of America Prime Brokerage client roster to 800 clients with US$30 billion in assets, according to an announcement posted on news wires today. He was originally with Montgomery Prime Brokerage Services, a division of Montgomery Securities, which was acquired by Banc of America. Mr. Vermut oversaw the growth of the BofA’s prime brokerage business, which achieved 100% revenues and earnings growth in its first five years.

Previously Mr. Vermut had been with Furman Selz for 12 years as managing director of the prime brokerage division, according to Banc of America’s prime brokerage web site.

In a letter to his prime brokerage clients, obtained by HedgeWorld, Mr. Vermut wrote: “Today our business is considered by many to be the quality Prime Broker in the industry. Building this business has been the most fun I have ever had and an experience that will stay with me for the rest of my life. What could be better than that?”

That question has yet to be answered, since it is not known where Mr. Vermut is heading or whether he will be replaced. According to a source, it is not clear why Mr. Vermut left. Officials at Banc of America were not available for comment.

Part of the reason for Mr. Vermut’s departure might lie in a restructuring of the firm that integrates the equity lending and derivatives area of Banc of America with the prime brokerage services unit, according to the source. Last fall, clients were informed that officials would start bringing in the capabilities of the derivatives finance area under the prime brokerage umbrella in order to attract a wider client base. That move is thought to help officials go after managers of arbitrage strategies, the source said.

For internal purposes the prime brokerage area has been renamed. The new prime brokerage group will be a much more complicated organization and will be roughly three times the size of the original prime brokerage business, the source added. Until now the prime brokerage unit’s focus has been largely on plain vanilla equity-oriented services. The firm also has a reputation of working with emerging hedge fund managers.

According to the 2002 HedgeWorld Service Provider League Tables, Banc of America Prime Brokerage Services ranked sixth by fund assets. Working with 63 funds totaling US$3 billion in assets, Banc of America has met with success mainly in the United States, where brokerage officials serve funds with US$2 billion in assets under management, according to the report.

SBarreto@HedgeWorld.com