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NEW YORK, April 20, 1999 - American International Group, Inc. (AIG) has announced that it has reached an agreement with John McStay Investment Counsel ("JMIC") to acquire a majority interest in the Dallas-based investment management company for an undisclosed sum. The transaction is expected to close in June.

JMIC is a leading provider of money management services to a variety of clients, including endowments, universities, foundations, public funds, pension plans and individuals. The firm offers two basic products -- smaller and mid-capitalization growth equities and real estate securities. It also has a family of mutual funds, the Brazos funds, which have an investment focus primarily on smaller and mid-market capitalization growth stocks and real estate securities. Since its inception, JMIC has generated investment returns consistently exceeding its relevant benchmarks as well as many broader indices, based on its investment philosophy that combines exhaustive, company-specific basic research with a team approach.

John McStay Investment Counsel was founded by four partners, all of whom are still with the company and have worked together for over 20 years. There are eleven analyst/portfolio managers who are critical components of the firm's team-oriented investment approach. Under the agreement announced today, managing partner John McStay will continue as Chief Executive Officer, and all the other investment professionals are expected to remain with the company following the closing, and will be equity owners. The firm's exceptional investment performance, combined with a stable management team and superior customer service, have produced an extremely loyal client base.

Commenting on the agreement, AIG Chairman M.R. Greenberg said, "Expanding our global asset management business is a priority for AIG, and we are pleased to have signed this agreement with John McStay Investment Counsel, an outstanding firm with a group of professionals who have compiled an enviable record of investment performance for their clients. They will continue to manage their business as they have done in the past, but will now have the benefit of the AIG and SunAmerica distribution networks to expand their Brazos mutual fund products. We view this as a strategic combination that will have strong benefits for both AIG and John McStay Investment Counsel."

John McStay noted that "This alliance with AIG is a wonderful fit for JMIC, both strategically and culturally. We are an investment management company with unique skills singularly committed to our particular niches of investment research and portfolio management. This combination allows us to continue to focus on what we do well, while benefiting from the distribution strengths and resources of a world class financial institution."

The Brazos funds will be available in the United States through the SunAmerica distribution network.

AIG is the leading U.S.-based international insurance organization and the largest underwriter of commercial and industrial insurance in the United States. Its member companies write property, casualty, marine, life and financial lines insurance in approximately 130 countries and jurisdictions, and are engaged in a range of financial services and investment management businesses. American International Group, Inc.'s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.