It looks like the sale of American International Group Inc.'s (NYSE:AIG) asset management unit, AIG Investments, is heating up. Apparently, Macquarie Group Ltd. is bidding for the division that manages assets for pension funds,
insurance companies and wealthy individuals, according to
Bloomberg.
A source confirmed the report that Macquarie was one of the firms bidding for AIG Investments, which has about $100 billion under management, and the insurer expects to get as much as $500 million for the asset.
Other bidders for the unit supposedly include Ashmore Investment Management Ltd., Hellman &
Friedman LLC, Rhone Group LLC and TA Associates, as well as mutual fund
manager Franklin Templeton Investments and asset manager Southgate Alternative
Investments, according to
The Wall Street Journal. The unit was expected to
get bids
anywhere between $400 million and $800 million.
AIG had originally hoped to finish the sale by the end of May, according to reports, but the process could run longer.
According to
The Sydney Morning Herald last week, Macquarie raised $540 million in a placement and CEO Nicholas
Moore, is shifting focus from infrastructure to stock and bond
management:
" 'It would make sense,' said Paul
Xiradis, chief executive of Ausbil Dexia, which owns Macquarie shares told The Sydney Morning Herald. 'The business model of Macquarie is going to be more oriented towards
transactional-type management rather than recycling assets as they have
done in the past because the structure of the market has changed.' "
AIG announced on May 7 a greater-than-expected $4.35 billion loss for the first quarter ended March 31. AIG blamed a large part of its losses to costs related to the wind-down of
its AIG Financial Products derivatives unit and mark-to-market
write-downs on investments in the AIGFP business as well as in the
Maiden Lane II and Maiden Lane III funds, according to The Deal's Michael Rudnick. (Read the whole story in The Deal Pipeline.)
AIG has been selling off assets in order to pay back the government's $180 billion bailout package. So far AIG has sold off $4.4
billion in assets. Those assets include:
There are also still several sales being finalized:
- AIG's Advisor Group division, housed within AIG's retirement
services division, which consists of three broker-dealers -- SagePoint
Financial Inc. of Phoenix, FSC Securities Corp. of Atlanta and Royal
Alliance Associates Inc. of New York -- could sell for about $200
million. Private equity firms Clayton, Dubilier & Rice Inc. and
Warburg Pincus have dropped out of the bidding for AIG's Advisor Group
division, leaving GTCR Golder Rauner LLC and several new bidders, The
Deal's Michael Rudnick reported. However, the three broker-dealers have lost nearly 14% of their advisers since February.
- The sale of AIG's aircraft
leasing unit, International Lease Finance Corp., or ILFC, could be finished soon. The Financial Times
is reporting that the insurer has received second-round bids from
private equity firms Thomas H. Lee Partners and Carlyle Group, Onex
Corp. and Greenbriar Equity Group, as well as an unidentified third
bidder. As Dealscape
previously noted, ILFC has a book value of $7.5 billion as of Sept. 30,
and bids were supposed to come in at around $5 billion. However, Reuters
is reporting that the unit may sell for under $5 billion. The figure is
not surprising considering AIG needs to repay $100 billion in debt and
does not have the cash to meet debt obligations of $33 billion for
ILFC's operations in 2009 due to the struggling airline business
and loss of its federal commercial paper lending facility after key
credit ratings were cut. The Financial Times reported that the government may even extend AIG
a $5 billion loan to divest ILFC, which should just about cover the
purchase for the private equity firm that decides to buy the unit. The
credit line would come from the $180 billion bailout the government has
already extended to the insurer.
- The AIG Global Real Estate fund management business has around
$12.4 billion in assets and $5.2 billion in equity capital. The unit could be sold
for about $9 billion. Interested bidders could include BlackRock Inc.
and Blackstone Group LP (which might be a conflict because Blackstone
is advising). Included in that is its Japanese headquarters in Tokyo,
which may bring in more than $1 billion.
- AIG Edison Life Insurance Co. and AIG Star Life Insurance Co. are
also up for sale. Bidders could include: Prudential Financial Inc.,
Manulife Financial Corp., Allianz Group, Aegon NV, Nippon Life
Insurance Co., Tokio Marine Holdings Inc., Gibraltar Life Insurance Co.
Ltd., T&D Holdings Inc. and Manulife Life Insurance Co. The value
is estimated to be around $1 billion.
- AIG's property and casualty division could also be on the block or may spin out into a public entity.
- There are apparently two bidders for AIG's 15-story Japanese
headquarters, and the expected buyer is a Japanese insurance company,
according to The Wall Street Journal. The report says bids, which are reportedly around $1 billion, are in line with what the company
was asking.
AIG canned the sales of Alico, Philamlife unit and AIA in the government's last bailout. The insurer wants to create two special purpose vehicles, one each for its
property/casualty and life insurance businesses to eventually be
spun off and taken public or sold. The company is considering also combining its domestic
life and retirement businesses to create a larger company with a new
identity, according to The Wall Street Journal. - Maria Woehr
Also see:
AIG posts a net loss of $4.35B
AIG Dealwatch
AIG's Liddy to testify on taxpayers investment
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