NEW YORK - AMERICAN International Group Inc has agreed to sell a part of its asset management business to Hong Kong tycoon Richard Li's Pacific Century Group for about US$500 million (S$718.5 million), in the first major asset sale under the watch of its new chief executive.
AIG, which was rescued by the US government with up to US$180 billion in taxpayer funds, said it will get US$300 million in cash at closing and a future consideration that includes a performance note and a continuing share of carried interest.
AIG Chief Executive Robert Benmosche told Reuters late last month that he did not favour a quick sale of company assets at any price, as the insurance giant tries to raise money to pay back some US$80 billion it owes to the government.
Since taking over on Aug 10, Mr Benmosche has stopped the sale of the AIG's broker dealer group and paused the auction of its aircraft leasing unit, International Lease Finance Corp.
He also said in the interview that he had not yet decided what to do with the asset management business. 'I'm concerned about its value in the marketplace right now,' he said.
The deal with Pacific Century Group was done at a price that's competitive with other recent comparable asset management transactions, a source briefed on the matter said, declining to be named because the information is not public.
The business was put on the block at the beginning of this year, but the auction process dragged on for months.
In June, a source said that Pacific Century Group was planning to join a consortium of Franklin Resources Inc and private equity firm Crestview Partners LP, which was in exclusive talks at the time to buy the unit.
But Franklin subsequently dropped out of the group, and Crestview, which came close to doing a deal last month, did not make it past the finish line either.
Bridge Partners LP, a company owned by the Hong Kong-based private investment firm will buy the unit.
The business being sold operates in 32 countries and manages about US$88.7 billion of investments of institutional and retail clients across a variety of strategies, including private equity, hedge fund of funds, listed equities and fixed income. -- REUTERS
