AIG Brazil team halts investments

A key-man clause on the firm's $692m Fund II was triggered when the head of AIG Investments’ Brazil team left. The unit has decided to terminate the investment period.

AIG Investment’s Brazil team will stop making new investments from its $692 million second fund, which has only invested about 25 percent of its capital. The balance of commitments will remain uncalled.

AIG Investments, which Hong Kong billionaire Richard Li has agreed to buy from AIG, decided to terminate the investment period on the second fund in October after a key-man clause was triggered when the Brazil team’s chief, Ana Vigon, left for undisclosed reasons.

Management fees are only being collected on invested capital, a source told PEO. Capital may still be called for follow-on investments in existing portfolio companies, a source with knowledge of the situation told PEO.

The fund, Brazil Special Situations Fund II, collected about $692 million and closed in 2008. The team’s first special situations fund raised $215 million.

The Brazil team will tend to the investments that were made from the fund, which include companies like Falcon Farms, a flower company, and Providência, a fabric manufacturer.

AIG Investments remains committed to investments in Brazil and the team may look to raise a new fund at some point, the source said.

Pacific Century Group, controlled by Richard Li, agreed in September to pay $500 million to buy AIG’s asset management units that are part of AIG Investments, including platforms managing secondaries, co-investment and infrastructure assets.

The US government has committed $183 billion to AIG to save the company. AIG, which has used about $83 billion of the funds, has been selling assets to pay back the government.