AIG 2005 Annual Report Download - page 43

AIG ■2005 Annual Report 41
independent financial professionals, AIG
Advisor Group is the largest independent
broker-dealer network in the United States
and is comprised of Advantage Capital
Corporation, AIG Financial Advisors, FSC
Securities Corporation and Royal Alliance
Associates.
AIG Private Bank Ltd. reported solid
results in 2005 and continued to expand
its global operations by developing its
broker-dealer company and applying for a
branch license in Hong Kong. It was also
the first foreign private bank to open a
representative office in Shanghai, and
made significant progress toward establish-
ing a private banking business in Buenos
Aires. AIG Private Bank has also increased
its distribution of diversified hedge fund
portfolios managed by AIGGIG and con-
tinued to execute cross-selling strategies
with other AIG companies.
Guaranteed Investment Contracts
(GICs) contributed $1.19 billion to operat-
ing income in 2005. In September, 2005,
AIG launched a $10 billion matched
investment program in the Euromarkets,
under which AIG debt securities will
be issued. AIG also expects to launch a
matched investment program in the
domestic market, which, along with the
Euro program, will become AIG’s principal
spread-based investment activity.
success. AIGGIG also furthered its part-
nership with AIG’s Domestic Brokerage
Group to cross-sell to insurance clients.
AIGGIG garnered several outstanding
performance accolades from the invest-
ment community in 2005. Many equity
and fixed income portfolios won awards
including the European Small Cap Fund,
the Japan Small Cap Fund, the Latin
America Large Cap Fund and the Singa-
pore Bond Fund. Pensions and Investments
ranked AIGGIG as one of the world’s five
largest institutional asset managers.
AIG SunAmerica Asset Management Corp.
(AIG SAAMCo) manages and/or administers
retail mutual funds, as well as the underly-
ing assets of AIG SunAmerica and AIG
VALIC variable annuities sold to individu-
als and groups throughout the United
States. In 2005, AIG SAAMCo benefited
from new product launches, including its
first closed-end mutual fund, and the
Horizon Funds, which provide additional
investment and retirement planning solu-
tions. AIG SAAMCo also demonstrated
strong performance in several mutual fund
classes, including the SunAmerica Income
Funds, Focused Asset Allocation Strategies
and Focused Portfolios. SunAmerica
Focused Technology earned the Lipper
Fund Award for best fund over the past
three years and AIG SunAmerica’s income
funds were rated as the top-performing
group of taxable bond funds by Barron’s
for 2005.
AIG Advisor Group, Inc. broker-dealers
provide a broad range of financial products
and support services to independent
financial advisors serving the retirement
planning needs of clients nationwide.
In 2005, assets under management and fees
for advisory services increased, contribut-
ing to the Group’s results. With over 7,000
AIG Global Investment Group (AIGGIG) reported
strong growth in both revenues and assets
under management in all of its key areas,
including listed equity, private equity,
hedge funds, fixed income and real estate.
AIGGIG companies and other investment
operations of AIG had over $62 billion of
client assets under management at the end
of 2005, an increase of 20.6 percent for the
year. A significant portion of this growth is
attributable to record new business, which
included four oversubscribed private equity
and real estate funds that closed during
2005. At year end, AIGGIG and other
AIG operations managed $541.11 billion
in AIG’s insurance and asset management
portfolios.
AIGGIG successfully initiated and grew
strategic relationships with key investors
across a wide spectrum of markets and
asset classes in 2005 by drawing upon its
“Investor to Investor” approach, in which
AIG companies invest a meaningful stake
of their own assets alongside AIGGIG’s
clients. To support its growth, AIGGIG
expanded its global operations to encom-
pass 44 investment offices worldwide.
In addition to adding new investors to
its global client roster in 2005, AIGGIG
ensured retention of its established
customer base by consistently delivering
innovative product offerings, including
new real estate, private equity and hedge
funds. As a result, 60 percent of new assets
raised in 2005 were from existing clients.
In 2005, AIGGIG continued to grow its
AIG-Huatai Fund Management Company
Limited in China and initiated planning
for its first asset management company in
India – two crucial regions for future