Franklin Templeton Investments has emerged as a frontrunner to acquire American International Group’s (AIG) investment unit, reports Wall Street Journal. Franklin has partnered with Crestview Partners LP, a New York-based private equity firm, for the bid. India's Religare

Enterprise has also showed interest in the unit, and had partnered with Australian banking giant Macquarie to buy out AIG Investments.

Macquarie and Religare are ready to jump back in the race if talks with Franklin fail, the WSJ reports adds. But the talks with Franklin are exclusive at this time. The deal with Franklin-Crestview is expected to be ina form of management buyout, with top management being retained and given a stake.

AIG is selling its assets in order to repay the $182.5 billion bailout by the US government.

The bids are expected to be in the range of $500 million. The AIG Investments unit has about $100 billion in funds under management. Religare had reportedly earlier made a bid of $700 million, which was revised to below $500 million after it tied up with Macquirie. Religare and Macquarie have a wealth management joint venture in India. The Delhi-based financial services firm has been promoted by the Singh family, which till recently owned Ranbaxy Laboratories.

AIG also has two insurance JVs with India's Tata group - Tata AIG Life and Tata AIG General. The Tata's are expected to buy AIG's stake in these ventures.

Charles E. Johnson, a former Franklin Co-President, is advising Franklin on the deal. Johnson has an India connection as he is the founder of private equity firm Tano Capital, which invests primarily in Indian and Chinese companies. He is the grandson of Franklin founder Rupert H. Johnson Sr and the son of the current chairman, Charles B. Johnson.

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