The firm was one of the first mainstream players into hedge funds. Mr. Guterman said the company's hedge fund of funds product was launched in 1982, although it was marketed to pension schemes only in the past four years. He said this product is now popular with investors in Switzerland and Scandinavia. The firm has global hedge-fund-of-fund assets under management of $2.5 billion as of June 30.
He declined to provide details of any hedge fund clients in Europe.
"Two or three years ago, we had very little in hedge funds, next to zero," he said, referring to the fact the firm hasn't until recently managed hedge fund assets for clients outside of the AIG Group.
Of the $7 billion in European assets managed by AIGGIG, about 20% — $1.4 billion — is invested in either private equity or hedge funds, he said.
He expects that share to shoot up dramatically in the next few years, driven by what he believes will be the translation of investors' curiosity about hedge funds into actual commitments.
There's a similar story in private equity, where AIGGIG manages some $1.4 billion in private equity worldwide, both in direct investments and funds of funds, as of Jan. 1. The firm is raising more assets this year, and also manages some money in infrastructure assets.
"I'm not saying we don't want a traditional business in Europe with large-cap equities, bonds and all that. We want to provide everything to the clients, but that will take time. And it's hard in the U.S. There, having a five-year track record in large-cap U.S. equities is nothing, because there are so many firms that have 15- or 20-year track records," he said.
He said the firm had relatively short track records in some asset classes, including U.S. equities and large-cap global equities.
Thus, he isn't expecting AIGGIG to begin winning mandates from clients both in Europe and the United States for some time.
"We are talking to the consultants, in London also, but the feedback we are getting is our niche products are more interesting to them. One (U.S.) consultant told us there's a real need for small-cap managers, but there isn't a good supply of them," he said.
He couldn't provide a breakdown of how much the firm manages in small-cap assets.