AIG 2010 Annual Report Download - page 280

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 for fair value.
December 31, 2010(a) December 31, 2009
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 $ 3,137 $ 1,151 $ 3,166 $ 1,553
of a transaction in which assets of mature
companies are acquired from the current
shareholders, typically with the use of financial
leverage.
Non-U.S. Investments that focus primarily on Asian and 172 67 543 103
European based buyouts, expansion capital,
special situations, turnarounds, venture capital,
mezzanine and distressed opportunities
strategies.
Venture capital Early-stage, high-potential, growth companies 325 42 427 48
expected to generate a return through an
eventual realization event, such as an initial
public offering or sale of the company.
Fund of funds Funds that invest in other funds, which invest --334 -
in various diversified strategies
Distressed Securities of companies that are already in 258 67 238 91
default, under bankruptcy protection, or
troubled.
Other Real estate, energy, multi-strategy, mezzanine, 373 147 336 182
and industry-focused strategies.
Total private equity 4,265 1,474 5,044 1,977
funds
Hedge funds:
Event-driven Securities of companies undergoing material 1,310 2 1,426 -
structural changes, including mergers,
acquisitions and other reorganizations.
Long-short Securities that the manager believes are 1,038 - 955 -
undervalued, with corresponding short
positions to hedge market risk.
Relative value Funds that seek to benefit from market 230 - 286 -
inefficiencies and value discrepancies between
related investments.
Distressed Securities of companies that are already in 369 20 272 -
default, under bankruptcy protection or
troubled.
Other Non-U.S. companies, futures and commodities, 708 - 785 -
macro and multi-strategy and industry-focused
strategies.
Total hedge funds 3,655 22 3,724 -
Total $ 7,920
(b)
$ 1,496 $ 8,768
(b)
$ 1,977
(a) Because of the sale of the investment advisory business in 2010, certain partnerships and hedge funds are no longer carried at fair value and
are not included in this table.
(b) Includes investments of entities classified as held for sale of $415 million and $1.1 billion at December 31, 2010 and December 31, 2009,
respectively.
264 AIG 2010 Form 10-K