Former Paine Webber chief vies to buy AIG Advisors

Two private-equity firms with strong ties to retail broker-dealers are the final bidders for the AIG Advisor Group — the network of broker-dealers that houses about 6,000 independent registered reps and investment advisers — and a winner could be determined in the next several days, according to sources. One of the finalist firms is Lightyear Capital LLC of New York, whose chairman and chief executive, Donald B. Marron, was the former head of Paine Webber Group Inc. That firm, of course, was one of Wall Street's leading retail broker-dealers when it was acquired by UBS AG of Zurich, Switzerland, in 2000. The other private-equity shop closing in on the AIG Advisor Group is Lovell Minnick Partners LLC of Los Angeles and Philadelphia. Jeffrey D. Lovell, chairman and CEO, was one of the co-founders of Putnam Lovell Securities, now Jefferies Putnam Lovell in New York. Included in Lovell Minnick's portfolio of companies is PlanMember Financial Corp. of Carpinteria, Calif, the parent of PlanMember Securities Corp., an independent broker-dealer with about 350 reps and advisers. A spokeswoman for Lightyear Capital, Amanda Kiely, said the firm has no comment. A spokesman for Lovell Minnick could not be immediately reached. The three broker-dealers in the AIG Advisor Group's network are FSC Securities Corp. of Atlanta, Royal Alliance Associates Inc. of New York and SagePoint Financial Inc., formerly AIG Financial Advisors, of Phoenix. Combined, the three broker-dealers produced $1.1 billion in revenue last year, making it the second-largest network of independent broker-dealers based on revenue. Discussions and negotiations regarding the sale of the AIG Advisor Group have been in fits and starts for months, with many advisers anxiously awaiting the outcome. They started in the weeks after parent company American International Group Inc. of New York collapsed last September and was bailed out by the federal government. Linda Skolnick, a spokeswoman for the AIG Advisor Group, said the network's CEO, Larry Roth, was not immediately available to comment. A decision on the winning bid could come in the next few days, sources said. The price that the AIG Advisor Group would command in the sale is not clear. The most recent rounds of intense negotiations came in the late winter and early spring, with several potential buyers supposedly having interest. At that time, several sources acknowledged that the price tag being bandied about for the three AIG broker-dealers ranged from $200 million to $300 million.