With global markets in turmoil – and as the credit crunch worsens – AIG (NYSE: AIG) has the miserable task of raising $75 billion to meet its capital requirements. The firm has talked to various private equity firms (who have basically wanted the keys to the operation). There were even talks with Warren Buffett.
No doubt, AIG is scrambling to assess its asset base as well. Which could fetch good values?
Interesting enough, there is one asset that hasn't received much attention: an equity stake in Blackstone Group LP (NYSE: BX).
About 10 ears ago, AIG invested roughly $150 million in the private-equity powerhouse. Now, the stock is worth about $700 million. Moreover, AIG has investments in Blackstone funds that amount to about $1 billion.
So yes, AIG may dump these holdings on the market – and put pressure on Blackstone's shares, right?
Perhaps. Although, investors don't seem to be concerned (the stock price has held steady in the current financial storm). Then again, Blackstone doesn't have balance sheet issues. More importantly, the firm has been bulking up its abilities to capitalize on distressed investments – which seems spot-on right now.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
9-16-2008 @ 10:36AM
Mark H said...
I assume the author meant that AIG's stake in Blackstone was worth $700 million and NOT $700 billion. This is really no time for such careless and irresponsible mistakes.
9-18-2008 @ 9:45AM
gerald said...
Don't keep any policies with AIG they are a bad faith insurer. Sell all your stock in AIG before it hits $0. AIG only cares about its bottom line and not its customers or claims it owes people. I'm filing suit just to get paid what AIG refused to pay and it is a big lawsuit. I hope they go bankrupt and I going to do everything in my power to make it happen. I'm going back to their Dallas,Texas office in a few weeks to picket in front of their offices until I get them in court to get my money they owe me. My attorney said he can't believe how they handled my claim and he can't wait to get them before a jury either.
9-16-2008 @ 12:39PM
Kent said...
If it's $700 million, it will hardly make a dent in AIG's new capital requirement.