AIG 2011 Annual Report Download - page 274

American International Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Transfers of Level 3 Liabilities
During the year ended December 31, 2011, there were no significant transfers into Level 3 liabilities. As AIG
presents carrying values of its derivative positions on a net basis in the table above, transfers out of Level 3
liabilities, which totaled approximately $133 million for the year ended December 31, 2011, primarily related to
certain derivative assets transferred into Level 3 because of the lack of observable inputs on certain forward
commitments. Other transfers out of Level 3 liabilities were due to movement in market variables.
AIG uses various hedging techniques to manage risks associated with certain positions, including those classified
within Level 3. Such techniques may include the purchase or sale of financial instruments that are classified within
Level 1 and/or Level 2. As a result, the realized and unrealized gains (losses) for assets and liabilities classified
within Level 3 presented in the table above do not reflect the related realized or unrealized gains (losses) on
hedging instruments that are classified within Level 1 and/or Level 2.
The following table includes information related to AIG’s investments in certain other invested assets, including
private equity funds, hedge funds and other alternative investments that calculate net asset value per share (or
its equivalent). For these investments, which are measured at fair value on a recurring or non-recurring basis,
AIG uses the net asset value per share as a practical expedient to measure fair value.
December 31, 2011 December 31, 2010
Fair Value Fair Value
Using Net Unfunded Using Net Unfunded
(in millions) Investment Category Includes Asset Value Commitments Asset Value Commitments
Investment Category
Private equity funds:
Leveraged buyout Debt and/or equity investments made as
part of a transaction in which assets of
mature companies are acquired from the
current shareholders, typically with the use
of financial leverage $ 3,185 $ 945 $ 3,137 $ 1,151
Non-U.S. Investments that focus primarily on Asian
and European based buyouts, expansion
capital, special situations, turnarounds,
venture capital, mezzanine and distressed
opportunities strategies 165 57 172 67
Venture capital Early-stage, high-potential, growth
companies expected to generate a return
through an eventual realization event, such
as an initial public offering or sale of the
company 316 39 325 42
Distressed Securities of companies that are already in
default, under bankruptcy protection, or
troubled 182 42 258 67
Other Real estate, energy, multi-strategy,
mezzanine, and industry-focused strategies 252 98 373 147
Total private equity funds 4,100 1,181 4,265 1,474
260 AIG 2011 Form 10-K
INVESTMENTS IN CERTAIN ENTITIES CARRIED AT FAIR VALUE USING NET
ASSET VALUE PER SHARE