American International Group, Inc. (AIG) said Wednesday that it has agreed to sell a 9.9% equity stake in its Life & Retirement businesss to Blackstone for $2.2 billion.
AIG will enter into a long-term strategic asset management relationship with Blackstone to manage an initial $50 billion of Life & Retirement’s existing investment portfolio upon closing of the equity investment, with that amount increasing to $92.5 billion over the next six years.
Separately, Blackstone Real Estate Income Trust (BREIT) will acquire AIG’s interests in a U.S. affordable housing portfolio for approximately $5.1 billion, in an all cash transaction, the companies said.
“AIG has stewarded the affordable housing portfolio for more than 30 years. While the highly specialized assets subject to this transaction are attractive investments, they are no longer core to AIG’s long-term investment strategy. We believe Blackstone has the right expertise and commitment to stakeholders to manage these assets going forward,” said Peter Zaffino, President and Chief Executive Officer of AIG.
Kathleen McCarthy, Global Co-Head of Blackstone Real Estate, commenting on the real estate transaction, added: “These communities provide critical affordable housing and we look forward to being long-term owners. We will make significant investments to improve the apartments while ensuring they remain affordable and in compliance with all rent regulations. We are committed to working with our partners in this sector to expand the supply of affordable housing.”
In June, Blackstone Real Estate Income Trust, Inc. (BREIT) has announced the acquisition of Home Partners of America (HPA) for $6 billion.