From Reuters:
* AIG deals yield $567.2 mln in advisory fees
* Every major Wall Street bank gets a piece
* $51 bln in sales in Q1 help shape league tables (Adds Goldman, Citi roles, background about AIG bailout and payment to banks)
The crumbling empire of American International Group Inc (AIG.N) is helping to pave Wall Street with gold.
Auctions of the bailed-out insurer's assets have generated more than half a billion dollars in fees since its near-collapse in September 2008, with every major Wall Street bank getting a piece of the action, estimates from Freeman Consulting show.
Many of these banks were also among the recipients of tens of billions of federal bailout dollars that were funneled through the insurer at the height of the crisis, saving them from potential losses and causing a public uproar.
The largest sale assignments came to fruition this quarter, when, in a space of just a week, AIG struck deals to sell two major foreign life insurance businesses, one each to Prudential Plc (PRU.L) and MetLife Inc (MET.N), for some $51 billion.
Those two sales have also played a significant role in shaping the first-quarter rankings of deal advisers, helping some investment banks make quantum leaps in the coveted league tables, Thomson Reuters data through March 25 shows.
Blackstone Group LP (BX.N), which has advised AIG throughout the crisis, jumped to No. 9 in the worldwide rankings from No. 78 over the same period last year. Lazard Ltd (LAZ.N), which advised Prudential, jumped to No. 5 from No. 11.
AIG, which has been selling assets to repay the U.S. government after a $182.3 billion taxpayer-funded rescue, has been involved in as many as 90 transactions with disclosed value of $67.7 billion, the data show. Together, these deals will generate an estimated $567.2 million in advisory fees, according to Freeman.
But AIG is only one piece of the global financial crisis that has driven financial institution deals in the last two years. The aftermath of the crisis is likely to play a role in keeping investment bankers busy in the coming months as well.
"Ongoing restructurings, access to growth markets and consolidation -- and they are all interlinked in a way -- but those three things are going to drive the business pretty strongly in the next few years," said Vikram Gandhi, head of Credit Suisse's global financial institutions group.
Credit Suisse Group AG (CSGN.VX), which advised both the buyers, rose to No. 2 from No. 6.
The bank started bulking up its financial institutions practice before the crisis and has focused on improving global coordination, which has paid off as many of the deals created by the crisis have been cross-border transactions.
"To a large extent this is a return on that investment," said Gandhi, who moved to Hong Kong from New York in the summer of 2008.
Goldman Sachs Group Inc (GS.N), which advised AIG on both these deals along with Citigroup Inc (C.N), climbed to the top spot from No. 4 last year. Citi slipped to No. 6 from No. 2.
Goldman has a relationship with Chief Executive Robert Benmosche going back to his days as the head of MetLife. The bank advised MetLife when it bought Travelers Life & Annuity from Citi for $11.5 billion in 2005.
Goldman was also one of the largest beneficiaries of the bailout money given to AIG's counterparties after the rescue....MORE
