AIG seeks sale of property fund management arm

AIG Global Real Estate, the property investor and fund management arm of global insurance and financial services company AIG, is planning the sale of its fund management business. Financial details were not disclosed.

The firm announced today that the sale of the business will be undertaken by Bank of America and Merrill Lynch. AIG Global Real Estate managed more than $12.4 billion of assets and $5.2 billion of equity commitments on behalf of 15 funds as of 30 September last year. No sale price has been disclosed.

AIG Global Real Estate’s fund management business is based in New York and has regional operations in Europe, Latin America and Asia. The sale will also include existing and future equity commitments by AIG Global Real Estate into the funds.

According to AIG, a buyer of the business would inherit the unit’s staff; funds investing in the core plus, value-added and opportunistic sectors; and access to portfolios spread across all real estate sectors, geographies and vintages.

The planned disposal is one of a number of operating units put up for sale by AIG in the wake of its bailout by the US federal government last November. AIG was in danger of becoming one of the largest casualties of the credit crunch before the US government intervened with a $150 billion rescue package.

The disposal of AIG Global Real Estate’s fund management business is expected to go some way to paying off this debt.

It is unclear at this stage whether or not AIG will look to divest its direct property portfolio, which comprises 53 million square feet of retail, residential, industrial, office and hospitality space in 50 countries.