(Reuters) - Billionaire investor Carl Icahn is backing off his demand to break up insurance giant American International Group Inc AIG.N, following the company's sale of assets and hiring of a new chief executive officer, a person familiar with the matter said.

FILE PHOTO: A banner for American International Group Inc (AIG) hangs on the facade of the New York Stock Exchange, in New York, U.S., on October 16, 2012. REUTERS/Brendan McDermid/File Photo - RTS15VEZ

Icahn, AIG’s third-largest investor, wants the insurer’s new CEO Brian Duperreault to have an opportunity to boost AIG’s return on equity, the person said. Icahn had a 4.95 percent stake, or 45.6 million shares, as of March 31.

Icahn was not immediately available to comment.

AIG named Duperreault, 70, CEO in May, selecting a protégé of former CEO Hank Greenberg and an industry veteran known for his turnaround expertise.

AIG has been the target of activist investors led by Icahn, who disclosed his stake in 2015 and called for breaking up the company to make it more successful.

Former CEO Peter Hancock responded by launching a two-year turnaround plan last year, which included the goal of returning $25 billion of capital to investors by year-end.

AIG, the largest U.S. underwriter of commercial property and casualty policies, has returned $18.1 billion to shareholders through buybacks since announcing the plan.

Hancock said on March 9 that he would depart once the board found a replacement, citing a lack of confidence among directors and investors.

Duperreault told reporters on Wednesday that AIG would likely slow the pace of share buybacks and instead spend on acquisitions.

“The likelihood we can continue the pace of share buybacks is low because there are other things I can use the money on,” Duperreault said.