With AIG shedding a number of its businesses to pay back government loans, its money management unit which runs more than $111 billion in global assets for external institutional and retail clients appears to be the next business to be put on the block by the distressed insurance giant.
Sources throughout the investment industry said that officials for New York-based American International Group Inc. sent the investment management unit's books out to a number of interested buyers near the end of January, and bids are due this week.
Its still early in the sale process, of course, but the sources said many of the private-equity firms that pursued New York-based Lehman Brothers Holdings Inc.s Neuberger Berman LLC investment management division last year are early front-runners for AIG Investments, one of the largest money management units in the world.
That means Bain Capital LLC of Boston and Hellman & Friedman LLC of San Francisco whose combined $2.15 billion bid for Neuberger was topped by Neubergers senior management in December are heading the list of potential buyers, sources said. Other private-equity firms, such as Carlyle Group LP in Washington and Kohlberg Kravis Roberts & Co. of New York, could emerge as strong candidates as well.
Its a distressed sale, and many of the private-equity firms that have been trying to buy their way into the asset management business think they might be able to buy this group at a relative bargain, said one investment banker familiar with the sale, who spoke on condition of anonymity. But we should find out if thats the case soon enough.
Charlyn Lusk, spokeswoman for Bain Capital; Monica Everett, spokeswoman for Hellman & Friedman; Michelle Ong, spokeswoman for Carlyle Group; and Peter McKillop, spokesman for KK; each declined to discuss a potential bid for the business. Win Neuger, chairman and chief executive of AIG Investments, was not available to discuss the potential sale, and spokesman Joe Norton said that the firm would not comment on any of its asset sales or divestitures.
AIG Investments runs a total of $676 billion in assets. But about $565 billion is affiliated with AIGs insurance business. The company has elected to sell, as a stand-alone business, the part of AIG Investments that runs the remaining $111 billion for outside clients.