AIG Investments close to $300M sale to Crestview

AIG Investments, the asset management arm of American International Group Inc., is close to being sold to a group that includes private-equity firm Crestview Partners for $300 million to $400 million, Reuters reported today, citing a source.

But while Crestview Partners LP — founded in 2004 by a group of former executives from The Goldman Sachs Group. Inc. of New York — may appear to be on the verge of doing a deal for AIG International Group of New York, other recent deals involving private-equity firms have fallen though, warned Geoff Bobroff, a mutual fund consultant in East Greenwich, R.I.

“We just don’t know, when we come out of this, whether they will be the winner of the transaction,” he said about Crestview’s bid for AIG Investments.

On Sep. 29, Lehman Brothers Holdings Inc. of New York agreed to sell its asset management unit Neuberger Berman LLC to a pair of private-equity firms, Bain Capital Partners LLC of Boston and Hellman & Friedman LLC of San Francisco, for $2.15 billion.

That bid, however, was scuttled after a competing bid was made by the firm’s management and eventually accepted by the U.S. Bankruptcy Court for the Southern District of New York on Dec. 3.

And Barclays PLC of London in April announced an agreement to sell its iShares exchange traded fund business to Blue Sparkle LP, a limited partnership established by CVC Capital Partners, a Luxembourg-based private-equity firm, for $4.4 billion.

That deal, however, contained a “go shop” arrangement allowing Barclays to seek better deals, and in June, BlackRock Inc. of New York announced that it had received written notice from Barclays that its board has accepted BlackRock’s offer to buy Barclays Global Investors of San Francisco, including its iShares business, for $13.5 billion.

AIG, however, is in an unusual position that makes getting a deal done with Crestview more likely, said Burton Greenwald, a Philadelphia-based mutual fund consultant.

AIG has been given taxpayer funds up to $180 billion and is under the gun to repay that money, he said.

“I think AIG is under some pressure to clean up things and move forward,” Mr. Greenwald said. “I think that fact, and the fact that Crestview is still in serious talks, I think it is likely we’ll see a deal.”

Crestview has no comment, said Jeffrey Taufield, a spokesman for the firm, and AIG did not return calls for comment.

Related Topics: American International Group (AIG)