Last Updated Sep 6, 2009 2:18 PM EDT
In the latest news over the Labor Day weekend, AIG sold off a piece of its asset management unit to a Hong Kong investment firm.
The sale is a bit of a puzzlement. AIG is retaining the bulk of its asset management, about $480 billion, while apparently selling off nearly $89 billion in foreign operations in 32 countries.
But the head of its asset management operations, the highly respected Win Neuger, is part of the sale. One gets the feeling that he, like other top executives including the chief of its aircraft leasing unit, has had enough of plugging holes in the AIG dike and wants to go somewhere where he can make money.
The price also leaves you scratching your head. It certainly won't go a long way toward repaying the estimated $38.5 billion that AIG owes the federal government. AIG got $500 million for about one-sixth of its asset management unit, which could mean the whole thing is worth about $3 billion.
But cash in hand from the sale is only $300 million. The rest is "additional consideration," such as a performance note and a continued share of carried interest. In other words, Win Neuger better keep his game up.
One positive note: Alain Karaoglan signed off on the sale as "AIG senior vice president - divestiture." Karaoglan is the former AIG analyst for Bank of America who in the past asked some very sharp questions about the company.
Now he's inside the fold, and apparently replacing Paula Rosput Reynolds, who was formerly running AIG's garage sale but, after new CEO Robert Benmosche came on board, has announced her departure. Perhaps her departure may be due to the fact that, in this case, she held out for too much. According to The Wall Street Journal, AIG could have sold this unit for $800 million this past April.