The future of AIG Investments is viewed by market insiders as a complicated matter following an $85 billion (€60 billion) bailout of parent company AIG that has given the US government an 80 percent ownership stake in the insurance giant.
AIG Investments is mammoth, with $758.2 billion in assets under management including $29 billion in private equity assets as of 30 June. In addition to private equity, which includes secondaries and infrastructure, the group has platforms for equities, fixed income, hedge funds and real estate.
Some $621 billion of AIG Investments’ assets are AIG-affiliated, although alternative investments including hedge and private equity have a proportionally greater level of client assets. Of $46.2 billion in alternatives, $17.9 billion are client assets, according to the group’s website.
“There are a few pockets [within AIG Investments] that can function independently and have third party capital, but not too many,” said a secondary private equity investor familiar with AIG Investments.
The situation is further complicated by the fact that AIG’s buyer is the US government.
“Given the government receivership, AIG assets will probably have to go through an auction which means a long process that will take months to even hit market,” said the same investor.
AIG Investments’ private equity activities include fund of funds and AIG-sponsored direct investment funds. The direct investment funds include capital dedicated to healthcare, mid-market buyouts, infrastructure, mezzanine, secondaries, various sectors in Asia and a number of emerging markets.
Further clarity as to the future of the asset management business can be expected on 25 September when AIG will produce a strategic plan to model asset sales and the paying down of debt, according to a report from Citigroup’s global markets equity research group.
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