But as the financial crisis worsened during early 2008, many companies began to default on their debt, forcing AIGFP to assume losses far greater than anticipated.

As a result, the Federal Reserve was issued a stock warrant for 79.9% of the equity in AIG, effectively nationalizing the world's largest insurer.

AIGFP played key roles in the acquisition of London City Airport and, in one of the largest private equity transactions announced in 2006, the management-led buyout of Kinder Morgan.

AIGFP's sponsored a major study on the historical performance of commodity futures by professors Gary Gorton and K. Geert Rouwenhorst.

[3] These losses at AIGFP division essentially bankrupted the entire AIG operation, and forced the United States government to bail out the insurer.

Gerry Pasciucco, a vice chairman at Morgan Stanley, who was not involved with AIG FP when it made its catastrophic bets, was selected to manage the unwinding of the portfolio in October 2008, after the company had effectively failed and been taken over by the Federal Reserve.