American International Group Inc. (NYSE: AIG) was expected to hold a meeting of the LP advisory board last week to convince investors that the sky isnt falling.
The gathering was to be a chance for AIG to introduce investors to new management personnel of its second Global Emerging Markets fund following last months dual dismissals of former fund chief Peter Yu and Managing Director William Jarosz.
This is a true test for AIG, said a source familiar with the situation, two days before the meeting occurred. If the advisory board members are convinced that AIG made a good decision, then the fund goes forward. If not, they could pull their commitments.
(The meeting was expected to occur Thursday, the day PE Week went to press.)
AIG spokesman Andrew Silver confirmed plans for the meeting, but downplayed the suggestion that it would essentially serve as a referendum on GEM IIs continued viability.
Thursdays meeting is to introduce [new GEM II head] David Yeung to those who dont already know him, and to provide an update on deals in the pipeline and to review the status of the fund, Silver explained. We will also reiterate to the advisory board what weve communicated to all limited partners over the past three week, which is that the funds underlying strategy remains the same.
One question LPs are sure to ask is why Yu and Jarosz were terminated at the same time that many of their investments were bearing ROI fruit. In early April, the group sold its 10% holding in Orange Romania to France Telecom at a purchase price multiple of approximately 4X, as part of a larger transaction. A few weeks later and just days after the firings GEM I generated another $131 million through a secondary IPO for Brazilian discount airliner GOL Linhas Aereas Inteligentes SA.
Neither Yu nor Jarosz have commented on their departures, and sources close to the pair insist that their dismissals were without cause, except that they were linked to a spinout agreement that was unpopular with post-Hank Greenberg management at AIG.
Spokesman Silver said that the company doesnt comment on personnel matters, to the point that he would not confirm the departures were involuntary.
In other AIG Capital Partners personnel news, Charles Mixon resigned shortly after the terminations, as did senior advisor Thomas Armstrong, who previously was co-founder of Advent International.
Also, Regina Mello recently resigned from the firms mid-market Horizon effort, while lower-level investors Chong Moua and Eric Jensen also left, to join American Capital and NewSpring Capital, respectively.