Religare in race for AIG's fund management unit
12 May 2009
Indian financial services firm Religare Enterprises is reported to have bid for the investment management arm of beleaguered US insurer, American International Group (AIG) as part of its plans to expand its financial services portfolio.
The reports say the Delhi-based company, leading the race for fund management unit among eight others, could pay around $600-700 million for the US insurer's investment subsidiary.
Religare has been talking to AIG Investments top management, led by Win Neuger, for nearly two months.
AIG Investments manages nearly $100 billion of assets from over 45 locations globally. It manages money in equities, fixed income, private equity, multi-strategy hedge funds and real estate funds.
AIG, which had taken $185 billion in government bailout money, is divesting the businesses which are non-core to its foreign general insurance operations and its foreign life insurance unit.
It has also put AIG Investment's East Africa unit for sale. AIG Investments is a heavyweight in Kenya's investment circles, being a major player in the local fund management industry.
In April, Zurich Financial Services Group 's subsidiary Farmers Group, Inc. has entered into an agreement to acquire AIG's US Personal Auto Group. (See: AIG sells off auto unit for $1.9 billion).
AIG Investments runs a total of $676 billion in assets. But about $565 billion is linked to AIG's insurance business. The company plans to sell, as a stand-alone business, the part of AIG Investments that runs the remaining $111 billion for outside clients.
Another contender in race for acquiring the business is Australia's investment banking major, Macquarie Group.
The Australia newspaper reported on Monday that Macquarie has directed its New York office to pitch for AIG investments, which the paper said has more than $100 billion worth of assets under management. Macquarie would place the AIG unit within its own funds management arm, the paper said.
Religare has interests in stocks, currency and commodities broking, wealth management, mutual funds, life insurance and private equity.
It recently got into a joint venture with Milestone Capital to manage a Rs600 crore healthcare and education fund. It recently bought 24 per cent more into its private equity joint venture Vistaar Religare capital advisors - a Rs200 crore fund that invests in films.
Meanwhile, Religare Capital Markets, the wholly owned subsidiary of Religare Enterprises, acquired 97.76 per cent stake in Hichens Harrison & Co Plc following the acceptance of its open cash offer by the UK firm.