AIG shops $2.3bn private markets portfolio – exclusive

American International Group, one of the US’s largest insurers, is exploring options to sell a private markets portfolio worth as much as $2.3 billion, Secondaries Investor has learned.

The New York-headquartered firm has already received first-round bids for the portfolio which contains mainly private equity fund stakes, according to four sources familiar with the deal. The portfolio also includes private credit, real estate and fund of funds interests, two of the sources said.

AIG wants to sell the stakes for portfolio management reasons, according to one of the sources. The insurer signalled in its 2017 annual report that it was planning to reduce the size of its private equity portfolio “in light of changing market conditions and perceived market opportunities”.

The firm had $498.3 billion in assets under management as of 31 December, around $58 billion of which were in illiquid assets including private company securities, investments in private equity funds and hedge funds.

It is understood AIG has not engaged an advisor to help with the sale.

Auctions that did not involve intermediaries accounted for 5 percent of deal volume last year, according to Campbell Lutyens’ 2018 Secondary Market Overview Report. Two-thirds of transactions last year were intermediated, the report noted.

If all $2.3 billion worth of interests trades, the deal would rank among the top five-largest portfolio sales on record. Other large disposals include the California Public Employees’ Retirement System’s 2015 sale of $3 billion worth of legacy real estate fund stakes to Blackstone’s Strategic Partners and Abu Dhabi Investment Authority’s 2014 sale of $2.4 billion worth of private equity interests to Ardian.

Financial institutions and insurance companies accounted for 18 percent of the $46 billion in private equity deal volume last year, up from 15 percent in 2016, according to UBS’s 2018 Secondary Market Survey and Outlook.

A spokeswoman for AIG declined to comment.