Almost since the day it acquired AIG (NYSE:AIG), hedge fund Third Point, run by noted investor Daniel Loeb, has been selling off its massive stake in the company.

And that only continued in the first quarter, as it slashed its total position in AIG -- including its options -- by almost 50%.

The impetus for the investment
In the fall of 2012, Third Point bought 23.5 million shares of AIG, which at the time were worth $770 million. In the quarterly letter outlining why the investment was made, the fund stated that as the U.S. Treasury continued to unload its position in the bailed out-insurer, it was able to "purchase AIG at a discount to intrinsic value." 

AIG received $182 billion in bailout funds during the financial crisis, but the government itself received a nearly $23 billion return on its own investment.

Yet despite the massive profits, Third Point said when discussing the massive position it made in the third quarter of 2012 -- it began purchasing shares in March of that year -- that "the U.S. Treasury's impending sales of its AIG holdings as an instance of one of our favorite types of investments: 'forced' (or non-economically motivated) selling."

The fund believed that AIG offered not only upside from its discount but also the business offerings it had, and following its reorganization and changes as a result of the financial crisis, based on the value its stock stood at, it provided "significant upside."

The continual sell-off
But since amassing its massive position in AIG, Third Point has steadily been unloading it:

All figures in millions. Source: SEC filings.

Even though AIG's stock rose by 55% since Third Point first began buying into the insurer, it has continued to sell off its investment. While Third Point isn't moving at the same rapid pace it did when it first bought into AIG, it nonetheless hasn't been shy to continue its selling streak.

The reason for the sell-off
Does this massive sell-off mean Loeb and Third Point no longer believe in AIG? We can't say for certain, but it's critical to remember what the firm notes is its investment approach:

Third Point employs a flexible, opportunistic investment style. We seek to identify situations with a recognizable catalyst which we anticipate will unlock value. We focus on delivering exceptional risk adjusted returns with limited market exposure.

Part of the reason behind the original investment was that Third Point thought the Treasury was holding in value, and the sale of its position served as the "catalyst" to "unlock value." But now that the government stake has officially been sold, it makes sense Third Point would begin selling off its own position, too.

The Foolish bottom line
Does that mean investors should also shy away from AIG? The short answer is no. Third Point's initial investment was focused on the Treasury's unloading of its position as a result of the bailout, and after that had been completed, it made sense that Third Point itself began to sell its shares.

Ultimately, AIG offers a compelling long-term investment consideration, and it has seen strong improvements in its core insurance operations over the years. When you add in the rebound in its brand value and consider that other hedge fund managers still call AIG a favorite investment, the reality is that just because one firm has steadily sold its shares, that doesn't mean you should.