American International Group Inc. (AIG) has reached an agreement to sell a part of its investment advisory and asset management business to Bridge Partners, L.P. for about $500 million. Bridge Partners, LP is owned by Hong Kong-based private-equity firm Pacific Century Group.

The $500 million purchase price includes a cash payment of about $300 million at closing, plus future payments consisting of a performance note and a continuing share of carried interest.

The units being sold operate in 32 countries and manage about $88.7 billion of investment of institutional and retail clients. However, AIG will retain its in-house investment operation that manages approximately $480 billion of assets.

Win J. Neuger will carry on as Chief Executive Officer of the new business. The existing management team will also remain in place. AIG’s financial advisor was UBS Investment Bank of UBS AG (UBS) while for Pacific Century Group, Perella Weinberg Partners acted as the financial advisor. Debevoise & Plimpton LLP served as legal advisor to AIG. The deal is subject to the usual regulatory and other approvals.

This sale is in line with the AIG’s restructuring plan of trimming its business after the company’s balance sheet was severely hurt by the subprime crisis. Although the company has been able to head off bankruptcy as a result of the bail-out funds received from the U.S. government, we believe that the company continues to face a significant threat to its franchise, business model, customer base and distribution network as a result of the financial crisis and a significant exposure to residential and commercial mortgage-backed securities.

Similar to AIG, Lincoln National Corporation (LNC) recently sold Delaware Investments, its investment management wing to Australia’s Macquarie Group for approximately $428 million.

Zacks Investment Research
View original at: Zacks.com News Feed

1. (AIV) Apartment Investment and Management Company Continues to Sell AssetsAimco Properties LP, a division of Apartment Investment and Management Co. (AIV), recently sold its...
2. (GE) General Electric to Sell Security BusinessGeneral Electric (GE) is arranging to sell its security business, which makes alarms, surveillance systems...
3. (NBR) Nabors Hurt by North American Drilling BusinessOur Underperform recommendation for Nabors Industries (NBR) reflects our bearish view of the North American...
4. (AIG) American International Group – Politicians Monitor Health InsurersDemocrats in Congress have asked the nation’s biggest health insurers to provide data on executive...
5. (LNC) Lincoln Sells Asset Management UnitLincoln National Corporation (LNC) has agreed to sell its asset management unit, Delaware Investments, to...
6. ($MO) Altria Group- Bear of the Day – Sell rating is recommended.Altria Group (MO) is the leading domestic tobacco company, which generates significant cash flow and...

Search Posts by Tag: AIG | American International Group, | LNC | UBS | UBS AG | Financial | Property & Casualty Insurance

RSS Feeds by Tag: AIG | American International Group, | LNC | UBS | UBS AG | Financial | Property & Casualty Insurance |

Other Posts by: vitalstocks | RSS Feed for this author