American International Group Inc agreed on Saturday to sell a part of its asset management business to Hong Kong tycoon Richard Li's Pacific Century Group for about $500 million, after an auction process that dragged on for months.

AIG, which was bailed out by the U.S. government last year, said it will get $300 million in cash at closing and a future consideration that includes a performance note and a continuing share of carried interest.

Bridge Partners LP, a company owned by the Hong Kong-based private investment firm will buy the unit.

The business manages about $88.7 billion of investments of institutional and retail clients across a variety of strategies, including private equity, hedge fund of funds, listed equities and fixed income.

AIG is retaining its in-house investment operation that oversees about $480 billion of assets under management.

UBS acted as financial advisor to AIG and Perella Weinberg Partners advised Pacific Century Group. Debevoise & Plimpton LLP served as legal advisor to AIG. (Reporting by Paritosh Bansal, editing by Jackie Frank)