American International Group is merging AIG Financial Products and AIG Trading, two overlapping businesses that have often been in direct competition. It could not be determined by press time who will head up the merged entity. Calls to AIG were referred to Andy Kaplan, general counsel, who did not return calls.
Both businesses originated from the remnants of Drexel, Burnham, Lambert, according to a former senior AIG employee. Howard Sosin, an ex Drexel banker, built AIG FP into a major player in long-dated interest rate swaps after joining in 1987 until his departure in the mid 90s. AIG Trading was set up by another group of Drexel bankers, led by Barry Klein, but has struggled since the departure of Klein and two other senior executives in 2001, the former employee said.
In an earlier attempt to end the turf war between the two groups, AIG is believed to have directed deals with maturities of five years or greater to FP and those with maturities under five years to Trading.
