Around half a dozen potential buyers have emerged for the asset management business of AIG, the stricken US insurance giant, but low bid offers may derail a deal, the Wall Street Journal reports.

Citing unnamed sources familiar with the matter, the paper said that several buyers have made offers between $400 and $800 million for AIG Investments, which comprises a $100 billion portfolio including hedge fund investments, private equity stakes, stocks and bonds.

Historically, a more typical price for an asset management business would be between 1 to 2 per cent of assets, meaning that AIG could pull the sale, the report said.

According to the paper’s sources, private equity firms Ashmore Investment Management, Hellman & Friedman, Rhône Group and TA Associates, along with mutual fund manager Franklin Templeton and asset manager Southgate Alternative Investments are among the potential buyers.

AIG had hoped to close a sale by the end of May, according to the paper; potential buyers will be shortlisted this week.

AIG has received over $170 billion in aid from the US government, and commentators have suggested that the insurer faces a difficult task of balancing the need to repay these funds and offloading assets at knockdown prices.

AIG has already sold its Swiss-based private bank, in a deal made with Abu Dhabi’s Aabar Investments in December 2008. Meanwhile, late last month it was reported that Bank of East Asia had sought approval from Taiwan’s Investment Commission for it to acquire AIG’s Taiwanese wealth management unit.