Clarkson among rich clients hit by closure of AIG investment fund

Insurer blaims lack of liquid assets, despite $85bn US government loan

Thousands of Britain's richest investors stand to lose as much as 25 per cent of what they believed to be a "low-risk" investment, after a run on an AIG investment fund forced the troubled insurer to take emergency measures to close the portfolio down.

The television presenter Jeremy Clarkson is known to be one of those who may lose out, after he was advised to transfer a large sum of money into the troubled fund, just weeks before it ran into trouble.

The fund in question – AIG Life's Enhanced fund, which was available to its Premier Access Bond customers – was closed to withdrawals during the middle of last month, after AIG, then the world's largest insurer, ran into financial difficulties. The company was eventually bailed out by the US government, which now owns most of the company.

However, even after the bailout, the AIG Enhanced fund remained closed, as it had insufficient liquid assets to pay out investors at short notice. The £5.5bn fund invests primarily in corporate bonds – including those of the troubled bank HBOS – many of which have lost much of their value in recent months, and would be worth much less than they were bought for if cashed in at short notice.

As a result, AIG has told investors in the fund that they can get 50 per cent of their money now, but will have to wait three years if they want to get the remainder back without incurring a nominal loss. If investors decide they want the remaining 50 per cent as soon as possible, they will have been warned that they will have to wait until December and will still get much less money back than they originally invested.

According to AIG literature, the Premier Bond, in which the Enhanced fund was an investment option, is a "Life assurance bond that offers investment in a choice of low-risk funds", and which aims to "allow quick and easy access to your investment which is normally free of charge". Investors are now faced with the unenviable choice of leaving their money with an institution which has let them down for another three years, or cashing in their investment and realising a loss.

Colin Jackson, of advisers Baronsworth Investment Services, said the customers in the AIG bonds were high net worth clients with hundreds of thousands of pounds in the funds. Martin Bamford, of advisers Informed Choice, said he had not put any of his clients into the funds. However, he said UBS had recommended it to several of their clients – including Mr Clarkson.

In a recent newspaper article, Mr Clarkson vented his fury about the situation. "I made strenuous efforts to get my money out of AIG as soon as the scale of its problems became apparent. But it wasn't possible. Inwardly I was screaming. It's my money. I gave it to you. You've squandered it on a Mexican's house in San Diego and a stupid football team and that's your problem. Not mine."

Not puttin' on the Ritz: Insurer cancels retreat

British bank executives beware. When your company gets bailed out with taxpayer money, expect much greater scrutiny of where you are spending your budgets. Fresh from one scandal – where it was revealed that its top salespeople were treated to spa treatments and golf outings at a Californian retreat – AIG was yesterday engulfed in claims it is spending its taxpayer money profligately.

This is the AIG, remember, that was given an $85bn government loan when its collapse threatened to bring down the financial system last month. Yesterday, the company cancelled plans to sponsor a similar event at the $400-a-night Ritz-Carlton hotel in California's Half Moon Bay. The event had aimed to "motivate and educate" about 150 independent agents who sell AIG coverage to high-end clients, a spokesman said.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
News
news
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
News
i100
Arts and Entertainment
tvChristmas special reviewed
Arts and Entertainment
Jenna Coleman as Clara Oswald in the Doctor Who Christmas special
tvForget the rumours that Clara Oswald would be quitting the Tardis
Arts and Entertainment
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all