The pizza guy will miss AIG-FP’s business
In Wilton, Connecticut, a bucolic town an hour’s drive from Manhattan, there is nowhere for AIG’s derivatives whiz kids to run, but neither is there a need to hide.
Even as questions of who is benefiting from AIG’s billions of bailout dollars stir resentment on Wall Street, people in Wilton — where AIG Financial Products, the unit that built highly complex trading instruments that eventually gutted the insurer, is based — aren’t throwing any brickbats.
People who live in the area said they have very little interaction with the dozens of businesses based in Connecticut’s dollar-dripping “Gold Coast,” dotted with golf courses and 10,000 square-foot homes.
Even local politicians didn’t have much to say about AIG-FP. “Ordinarily, I would be happy to answer your questions, but in this case I really have no knowledge of the company other than it is there,” said John Kalamarides, the local Democratic Town Committee chairman.
Michael Tucker, a professor of finance at the nearby Fairfield University, said the university’s business school engages with hedge funds and other financial institutions (in southwestern Connecticut, they’re a dime a dozen) from time to time, but recalled interactions with AIG Financial Products as being minimal.
“I went to one of their (AIG) meetings when Larry Summers was one of the speakers last fall,” Tucker said, jokingly adding, “seems like no one was talking about it at the time.” (See update below).
Since it moved to Wilton in 2000, AIG-FP seems to have kept a low profile in the town of about 18,000, which seems eons removed from the bustle of Wall Street finance, with its gently rolling hills and colonial-style houses.
But with a median home price of about $750,000, Wilton is no stranger to wealth. Many of its residents work in trade, finance, real estate or services. Why, the town even has a triple A bond rating from Moody’s — the same rating that was once a source of great pride for AIG and helped the Wilton unit to insure so many billions worth of debt derivatives.
The AIG unit’s low profile could be because it only employs about a hundred people. Also, the unit is located on the second floor of an office park on the southern tip of Wilton, along a corridor of strip malls and nail salons about five miles from the heart of town.
The 50 Danbury Road office complex, a 220,000 square foot space that rents at about $40 per square foot, is typically hush-hush in the manner of corporate environs, with all the trappings — tennis courts, a nice gym, inoffensive abstract paintings on the walls, artistic floral arrangements, a cafe that features pan-seared mahi-mahi, red chili-rubbed salmon and other upscale fare.
The AIG-FP employees were pretty tight-lipped when asked about the mood in their office. “I can tell you for sure, it isn’t business as usual,” said one worker. “I’ve got more important things to think about, so I must respectfully decline,” said another, when I asked him if the nervousness was palpable inside.
But one guy sure was upset at the news of AIG winding down its Wilton business. Dan Letizia, who runs Letizia’s Pizza with his brother in Norwalk, one town over, said he’s been delivering pizza to AIG-FP workers for years.
But “they’ve been ordering a lot less lately, ever since the financial mess happened,” Letizia said. “Will we go out of business because of AIG? No. But will we be affected? Yes!”
(Photo 1: A $2.5 million, 6BR home for sale in Wilton; courtesy Hastings Real Estate website. Photo 2: Reuters)
Update: Fairfield University’s Michael Tucker called me to clarify that he was not talking about attending a Larry Summers talk at AIG, but at another hedge fund. Here’s an excerpt from the recorded conversation: