Concern rises among wealthy investors over AIG money market fund
Anger is mounting among wealthy investors over prospective losses on a £5.8bn (€7.4bn) enhanced money market fund sponsored by troubled US insurer AIG.
Their irritation coincides with the publication of a US survey which shows disenchantment among wealthy investors towards advisers has hit a new low.
AIG investors blamed their advisers for putting them into the enhanced fund in the first place. The fund, currently suspended, was hit by redemption requests in the weeks leading up to AIG’s rescue. AIG is hoping to sell its UK operation to pay the Government back.
AIG expects to start paying back half the full value of the policy, plus interest, starting this week. Investors will have the option to transfer to a recovery fund underpinned by AIG in December.
Those who redeem the rest of their money are facing a significant loss. According to AIG assistant general manager Mark Hawthorne: “Recent trades for less liquid investments suggest that the rest of the fund would only be between 50% and 80% of full value.” He said that the fund raised exposure to liquid investments from 20% to 50% over the last year.
Criminal lawyer Joseph Hill has attracted 70 investors to his action group.
He said: “Investors do not appreciate being put into this situation. They want more information from their advisers. They expect them to be more proactive.”
An action group website – aigvictims.ning.com – has been created by aggrieved investor Simon Galbraith. Investors have reported they told their advisers they wanted to put money into safe, instant-access accounts, as opposed to the AIG fund.
Television personality Jeremy Clarkson, writing in The Sunday Times, has criticised AIG and his own adviser UBS.
UBS would not comment on Clarkson’s letter but said: “UBS, together with a number of UK competitors, has been in discussions with AIG on behalf of clients invested in certain AIG products. As usual our clients are our priority and we are working tirelessly to protect their interests.”
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