American International Group Inc. Chief Executive Officer Peter Hancock hired former colleague Doug Dachille to oversee the insurer’s investment portfolio of more than $350 billion, and agreed to buy his firm.
Dachille, 51, was named chief investment officer and takes over the duties of William Dooley, who is retiring, New York-based AIG said in a statement Tuesday. The insurer will acquire Dachille’s First Principles Capital Management, which oversees about $10 billion.
Dachille helped build the derivatives group at J.P. Morgan & Co., where Hancock also worked, and held positions at the bank including co-treasurer and global head of proprietary trading. Hancock’s hiring of an investments chief is part of a management overhaul he’s undertaken since becoming CEO last year.
The new CIO “has an extensive track record in all aspects of asset management, structured finance and risk management at global companies,” Hancock said in the statement. First Principles’ “customized asset-management services align with AIG’s commitment to providing the highest level of solutions-oriented services to clients.”
Dachille’s firm has about 20 employees and oversees funds for third parties such as banks, pensions, family offices and endowments. Terms of the First Principles deal weren’t disclosed.
AIG adds the operation after it sold asset manager PineBridge Investments to Pacific Century Group in 2010, when the insurer was divesting businesses to help escape a $182.3 billion U.S. government bailout. The company has since repaid the aid.
AIG’s available-for-sale bond portfolio was valued at about $260 billion as of March 31, with more than half that total in corporate debt and $37.7 billion in residential mortgage-backed securities. The company also makes loans tied to commercial real estate and helped start a venture last year to provide funding to medium-sized companies.
Hancock sought a new head of investments as Dooley prepared for his retirement after more than three decades with the company. Brian Schreiber, who was a top deputy to Dooley and oversaw the portion of the portfolio including holdings such as real estate, private equity and hedge funds, was named in May as chief strategy officer. That role includes acquisitions and divestitures.
The AIG chief also created new positions, hiring Philip Fasano as chief information officer and Michael Brady as chief technology officer. Both previously were executives at Kaiser Permanente, the nonprofit health insurer and hospital operator.
Insurers hold bonds to back obligations to policyholders and generate profits for shareholders. Many of the industry’s largest companies, including MetLife Inc. and New York Life Insurance Co., have also been pushing into third-party asset management. Running funds for clients can increase fee income while putting less stress on insurers’ balance sheets than investing their own funds.
Dachille will give up the CEO role at First Principles. That post will be taken by Richard F. Dolan, who is chief financial officer, and will report to Dachille. Both are listed as co-founders on the firm’s website.