AIG to enter wealth management

Global financial services company American International Group (AIG), which recently entered the mutual funds and consumer finance businesses in India, is planning to foray into wealth management, distressed assets recovery, mortgage guarantee and structured products as it looks to expand into more and more segments in Asia's second fastest growing economy.

"We have been developing our businesses in India at a steady pace. We don't want to rush into any new areas. Obviously, we are looking at business opportunities in mortgage guarantee, distressed assets recovery, wealth management and structured products," said Sunil Mehta, country head & chief executive of AIG in India.

The Group is already in life and general insurance (with the Tata group), private equity, air-craft leasing and real-estate in India. It sees good business potential in consumer finance and home loan businesses in India.

AIG had acquired a minor stake in Bangalore-based Weizmann Home and Chennai's Vivek Hire Purchase & Leasing, reflecting its plans to enter into home loans and consumer finance businesses.

"Regulations permitting, AIG will be in businesses where we see an opportunity," Mehta said.

In structured products, AIG was looking at derivatives and commodities hedging, which are not allowed under the current rules. Metal and oil hedging products are also on the group's radar, as and when these segments are opened up in India.

On the distressed assets front, AIG was observing how the entire segment develops in India. Global players including Blackstone, Shinsei Bank of Japan and W L Ross have already expressed a desire to become big players in the distressed assets market in India. "We are watching how the judicial side of the recovery process evolves in India," Mehta said.

On the mortgage guarantee front, AIG was awaiting the Reserve Bank of India's final regulations. "The Indian regulations framework has evolved in a manner that is conducive to market growth," he said, indicating that the group was not in a hurry to enter into this new business segment in India.

The home and consumer finance businesses are under AIG Capital, while the mutual fund, real-estate and private equity businesses come under the aegis of AIG Investments.

It is likely that the wealth management and mortgage guarantee segments may be managed by AIG Investments, while the other businesses would be overseen by AIG Capital India.