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 billion. 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
