The AIG Blackstone agreement was a deal that created a joint venture between American International Group (AIG) and private equity firm Blackstone. This joint venture, called Blackstone-AIG, was established in 2008, just a few months before the financial crisis hit.
The AIG Blackstone agreement was a significant move for AIG, which was facing financial difficulties at the time. AIG had experienced significant losses due to its involvement in insuring mortgage-backed securities, and it needed to raise cash quickly.
To do this, AIG formed a partnership with Blackstone, which would invest $500 million in the joint venture. In return, AIG would provide Blackstone with access to its extensive database of real estate holdings, allowing Blackstone to make better investment decisions.
The deal was seen as a win-win for both parties. For AIG, it provided much-needed cash at a time of financial crisis. For Blackstone, it gave the firm access to data that would help it make better investment decisions.
The joint venture was successful, with Blackstone-AIG acquiring a number of high-profile real estate assets, including the Stuyvesant Town-Peter Cooper Village complex in New York City. However, the financial crisis hit soon after the joint venture was established, and AIG was forced to sell its stake in Blackstone-AIG to Blackstone for just $100 million in 2009.
Despite the low sale price, the AIG Blackstone agreement was seen as a smart move for both parties. It allowed AIG to raise much-needed cash at a difficult time, and it provided Blackstone with valuable access to real estate data. Although the joint venture was short-lived, it was a significant chapter in the history of both AIG and Blackstone.