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Saturday, September 5, 2009

AIG to Sell Fund Unit

- American International Group Inc., the insurer bailed out by the U.S. government, agreed to sell its external fund management business to Richard Li’s Pacific Century Group of Hong Kong for about $500 million.

The purchase price for AIG Investments consists of a cash payment of approximately $300 million at closing, plus additional future consideration based on future performance and a continuing share of carried interest, New York-based AIG said in a statement.
AIG has already announced sales of some $9.3 billion of assets to help repay U.S. Federal Reserve loans extended as part of the firm’s $182.5 billion bailout.

The portions of AIG Investments up for sale managed about $114 billion of client assets, including stocks, bonds, and investments in hedge and private equity funds, when UBS AG started an auction for the unit earlier this year. The assets under management have declined since then.

Li, the son of Li Ka-shing, Asia’s richest man, is chairman of PCCW Ltd., the Hong Kong phone company.

The auction of AIG Investments attracted earlier interest from Franklin Resources Inc., the San Mateo, California-based fund manager, and Macquarie Group Ltd., Australia’s biggest investment bank, and New York-based Crestview Partners LP.
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