AIG Appoints Bond Expert Douglas Dachille as CIO

Douglas DachilleAIG has hired fixed-income veteran Douglas Dachille as its new CIO, inheriting the insurance giant’s $357 billion portfolio from retiring chief Bill Dooley.

Dachille, co-founder and CEO of fixed-income manager First Principles Capital Management, will report to AIG President and CEO Peter Hancock.

The insurer has also agreed to buy Dachille’s firm, which manages $10 billion. The deal is expected to close in the third quarter of 2015.

“Doug is a leader in financial services and investments, and has an extensive track record in all aspects of asset management, structured finance, and risk management at global companies,” said Hancock in a statement.

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The CEO added Dooley—who is retiring after nearly 40 years with AIG—would help Dachille transition into the CIO role.

Prior to co-founding First Principles in 2003, Dachille served as president of Zurich Capital Markets.

The new CIO also spent a significant portion of his career at JP Morgan where he headed global proprietary trading and worked as co-treasurer.

In addition, Dachille was responsible for building the bank’s hybrid derivatives business under the derivatives group Hancock ran at the time.

Dachille has a bachelor of science from New York-based Union College and was a Pew Scholar in Medicine, Arts, and Social Sciences at the University of Chicago.

He will give up his CEO title at First Principles by taking the CIO position at AIG, the insurer said.

The private equity sector has a war chest of capital and the patience to wait out expensive markets, industry luminary David Rubenstein said on interview program “Wall Street Week.”

Liz Ann Sonders—Charles Schwab’s chief investment strategist who was moonlighting as an interviewer—asked the Carlyle Group’s co-founder on Sunday if “the golden age” of private equity had ended, given the abundance of dry powder.

“We’ve had high stock prices for a long time now, and until there’s a market correction, it probably won’t be the case that you can buy many things,” Rubenstein replied. Private equity firms have made few acquisitions over the last year or so, he continued, in part because strategic buyers continually outbid them.

“I do think that when there’s a market correction—which will inevitably come along—you will see private equity taking some of this dry powder and deploying it in interesting ways,” Rubenstein told Sonders and co-host Anthony Scaramucci, whose hedge funds-of-funds business produces the show.

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“Investors are happy with somewhat lower returns which are somewhat easier to attain.”

Rubenstein also attributed the industry’s vast capital resources to its track record relative to other asset classes. Asset owners have also adjusted their performance outlook for private equity, making targets reachable for a larger number of firms.

“In the old days, 20 years ago, investors might want 25% annualized net internal rate of return,” he said. “Today, if you can get 16%, 17%, 18%, that’s great too… That has fueled more money coming in, because investors are happy with somewhat lower returns which are somewhat easier to attain.”

While private equity funds have been stockpiling wealth in anticipation of better deals, Rubenstein himself has been busy spending it.

The former White House staffer joined Bill Ackman, Warren Buffett, Seth Klarman, Carl Icahn, and many other investment billionaires in pledging to give away at least half of his money during his lifetime.

One of Rubenstein’s focuses has been on acquiring valuable historical documents for display in public.

In closing the interview, Scaramucci asked him to name his most treasured possession.

Rubenstein’s response: “The Magna Carta.”