Perella Weinberg Buys AIG Railcar Lease Unit

Perella Weinberg Buys AIG Railcar Lease Unit

Perella Weinberg Partners is buying the railcar leasing unit of insurance giant American International Group. The two companies did not disclose terms of their deal, but some reports put the value of the deal at $600 million.

When AIG put the unit up for sale last fall, it reportedly had more than 10,000 railcars for lease in North America with a book value around $660 million.

The companies said Chicago-based AIG Rail Services will operate as Flagship Rail Services once the deal closes, which is expected some time in the current quarter.

The firms also said Eugene Henneberry, president and CEO at AIG Rail, will continue with those titles at Flagship and run the business with his existing management team.

Besides its insurance operations, AIG has been a major lessor of transportation equipment, including airplanes through its International Lease Finance Corp. and railcars through AIG Rail Services. The U.S. seized AIG during the September 2008 financial collapse and provided a huge federal bailout to the firm.

In the rail equipment deal, certain funds within Perella Weinberg Partners' Asset Based Value strategy unit have formed a new entity to buy and manage AIG Rail Services, and convert it into a limited liability company.

That will make Asset Based Value the owner of the ninth-largest lessor of railcars in North America, the company said. David Schiff, partner at Perella Weinberg and portfolio manager of the Asset Based Value strategy unit, said "we continue to see long-term value in rail, and this transaction will allow us to expand our portfolio of rail-related assets, including railcars, chassis solutions and intermodal leasing."

-- Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter @jboydjoc.