AIG 2006 Annual Report Download - page 39

Annual Report 2006 AIG 373737
date. The International Finance Centre Seoul, a 5.7 million square
foot mixed-use project intended to satisfy growing demand for a
major, global financial district with corresponding amenities, was
inaugurated with a ceremonial groundbreaking in June of 2006.
Leveraging the strength of AIG Private Bank, AIGGIG formed the
Global Wealth Management unit during 2006 to focus on managing
money for high-net-worth individuals around the world. Wealthy
individuals are one of the fastest growing sectors in the investment
management market and the Global Wealth Management unit has
been targeted to be a major area of growth for AIGGIG. Zurich-based
AIG Private Bank specializes in providing asset management and
private banking services to a worldwide clientele. The bank reported
strong results in 2006 as it continued to expand its global opera-
tions, establishing a branch office in Hong Kong and applying for
abranch license in Singapore.
AIG SunAmerica Asset Management Corp. (AIG SAAMCo)
manages and/or administers retail mutual funds, as well as the
underlying assets of AIG SunAmerica and AIG VALIC variable annu-
ities sold to individuals and groups throughout the United States.
The company continues to demonstrate strong performance across
several mutual fund classes as a result of its strategy to expand its
internal portfolio manager investment team and sub-advisory platform.
Introducing innovative funds and delivering consistent performance
across several investment disciplines are among AIG SAAMCo’s key
growth strategies.
The AIG Advisor Group network of broker-dealers achieved
strong performance in every major category in 2006. The nation’s
largest independent broker-dealer network continued to deliver
strong technology support, independent product research and
abroad array of business-building programs to more than 8,100
independent financial advisors. Advisory services platforms for
fee-based financial advisors topped $32 billion of assets under
management by year end, reflecting AIG Advisor Group’s success in
meeting the growing demand for professional money management
services and consolidated performance reporting.
During 2005, the Matched Investment Program (MIP) replaced
the Guaranteed Investment Contract (GIC) program as AIG’s principal
non-insurance spread-based investment activity.While the MIP
showed strong growth in operating income in 2006, AIG does not
expect that the income growth in the MIP will offset the runoff in the
GIC portfolio for some time, as the asset mix under the MIP does not
include the alternative investments utilized in the GIC program.
Asset Management Financial Results
(in millions) 2006 2005
Revenues $ 5,814 $5,325
Operating income excluding FIN46(R) and EITF 04-5 1,748 1,992
FIN 46(R) and EITF 04-5* 598 261
Total operating income 2,346 2,253
*Includes the results of certain AIG managed partnerships that are consolidated effective January 1, 2006 pursuant to EITF 04-5, and certain AIG managed
private equity and real estate funds that are consolidated pursuant to FIN 46(R). These results are principally offset in minority interest expense in the
consolidated statement of income.
Real Estate 26.8%
Private Banking Services 20.9%
Alternative Investments 19.4%
Fixed Income 13.6%
Securities Lending 9.3%
Equities 8.7%
Other 1.3%
* Includes AIGGIG, AIG Global Real
Estate and AIG Private Bank. Excludes
FIN46(R) and EITF 04-5.
AIGGIG– Revenues
Total =$860.5 million
*