Bank of America has reached an agreement to sell the long-term asset management unit of Columbia Management to Ameriprise Financial for $1 billion. The bank is still considering what to do with its short-term asset management business.

BoA expects to close the deal, which gives Ameriprise an additional $165 billion in assets under management, by the spring of next year.

Analysts had valued the entire asset management business at Columbia for as much as $3.5 billion.

Commenting on the decision to sell the unit, BoA CFO Joe Price said, “The acquisition of Merrill Lynch provided an opportunity to look at our entire portfolio of businesses with an eye toward strengthening our capital position while ensuring that we continue to offer the broadest possible solutions to our customers and clients as one of the world’s leading financial services firms.”

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.