The Metropolitan Transportation Authority, the Teamsters, and pension cash for police, firefighters, and city employees in Fairfield, Connecticut, are amongst the groups that have filed six separate issues against Allianz Worldwide Traders. The satisfies allege that the German asset supervisor deviated from its expense mandate with no informing consumers and mismanaged cash.
The issues, filed in the Southern District of New York, say Allianz promised returns regardless of current market course and volatility.
“As a consequence of Allianz’s breaches, a sizeable part of [the pension program] property meant to give retirement stability to hundreds of employees and their beneficiaries was wiped out,” a lawsuit filed by health and fitness program service provider the Blue Cross and Blue Shield Association said. The MTA, in its submitting, said “negligent and imprudent” actions by Allianz had “decimated” the price savings of necessary personnel.
A spokesperson for Allianz said the allegations have been “legally and factually flawed” and the claimants were professional buyers who “bought these hedge cash in the information that they sought to provide sizeable returns.”
“As was completely disclosed, the cash included challenges commensurate with people increased returns,” the spokesperson.
At the close of March, Allianz liquidated two hedge funds and an offshore feeder fund amid steep losses. In April, Morningstar downgraded the remaining cash citing, “failure in risk administration protocols and the uncertainty.” Allianz, in an inner assessment, said the losses have been not the consequence of failures in its expense strategy or risk-administration approach.
“In the midst of the current market downturn, the portfolio administration team took active actions to cut down the portfolio’s risk, which includes by replacing then-present positions with additional conservative kinds — a restructuring approach carried out in earlier current market downturns,” the business said in a report on its Structured Alpha Portfolio performance.
Allianz disputed Morningstar’s downgrade.
Traders in one particular of the cash misplaced 97%, according to one particular lawsuit. Two of the cash had sought returns of a thousand foundation points of alpha.