American International Group Inc. has agreed to sell AIG Advisor Group to investment funds affiliated with Lightyear Capital LLC, a private equity firm specializing in financial services investing, and PSP Investments, one of Canada’s largest pension investment managers. Terms of the deal were not disclosed.
The transaction is expected to close in the second quarter of 2016, subject to regulatory approvals.
AIG Advisor Group is among the largest networks of independent broker-dealers in the United States, with more than 5,200 independent advisors and more than 800 full-time employees. Advisor Group is comprised of four broker-dealers, FSC Securities Corporation, Atlanta; Royal Alliance Associates, New York; SagePoint Financial, Phoenix; and Woodbury Financial Services, Oakdale, Minn.
“AIG continues to review its business strategy and take actions to become a more efficient, less complex company, able to respond to our clients’ needs with greater agility,” said Peter Hancock, president and chief executive officer of AIG, who cited high compliance costs of the broker-dealer unit as one reason behind the divestiture move.
Lightyear Capital, through its three affiliated private equity funds, has raised over $2.5 billion of capital and makes primarily control investments in North America-based, middle-market financial services companies.
PSP Investments is one of Canada’s largest pension investment managers, with CAD$112 billion of assets under management as at March 31, 2015. It invests funds for the pension plans of the Public Service, the Canadian Forces, the Royal Canadian Mounted Police, and the Reserve Force.