AIG’s Hedge Funds Rebound After $2 Billion in Losses

AIG earned $121 million from hedge funds in the period after the holdings cost the New York-based insurer $2 billion in the nine months ended March 31, the company said last week. Hedge fund at MetLife Inc., the biggest U.S. life insurer, also improved, beating the company’s forecast.

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AIG had $6.7 billion of hedge fund assets and $13.8 billion in private equity as of March 31, compared with $11.5 billion and $17.9 billion a year earlier. The company posted a $3.7 billion gain on partnership assets in 2007 and a $2.4 billion deficit on the holdings last year when the company was rescued by the U.S. because of record losses tied to mortgages.