BofA Unit Agrees to Sell Two Closed-End Funds

Bank of America Corp.’s investment management unit plans to divest two closed-end funds with assets of $1.3 billion after returns deteriorated during the last five years.

Banc of America Investment Advisors Inc., based in Boston, said Friday that it agreed to sell management of the $1.2-billion Liberty All-Star Equity Fund and $150-million Liberty All-Star Growth Fund to Alps Advisers Inc.

The funds, which trade on the New York Stock Exchange, would be overseen by existing Banc of America managers, who would work for Alps.

The funds fell in the 12 months through August while their benchmarks rose, according to All-Star Funds’ website.

The flagship Equity Fund, which dropped 8.8% in the last year, was hurt by investments in home builder D.R. Horton Inc. and St. Joe Co., Florida’s largest private landowner. Fort Worth-based D.R. Horton’s stock has fallen 41%; St. Joe is down 31%.

Alps Advisers is part of Alps Holdings Inc., which is owned by private equity firm Lovell Minnick Partners of Los Angeles.

Alps is seeking registration with the Securities and Exchange Commission as an investment advisor, according to a statement, which didn’t reveal the terms of the transaction.

The deal requires shareholder approval and is expected to be completed by the end of the year.