The Metropolitan Transportation Authority, the Teamsters, and pension funds for police, firefighters, and metropolis staff members in Fairfield, Connecticut, are amongst the groups that have filed six different problems against Allianz Worldwide Investors. The satisfies allege that the German asset manager deviated from its expenditure mandate without having informing customers and mismanaged funds.
The problems, filed in the Southern District of New York, say Allianz promised returns no matter of marketplace route and volatility.
“As a outcome of Allianz’s breaches, a considerable portion of [the pension system] property meant to provide retirement security to 1000’s of staff members and their beneficiaries was wiped out,” a lawsuit filed by wellbeing system service provider the Blue Cross and Blue Protect Association said. The MTA, in its submitting, stated “negligent and imprudent” steps by Allianz had “decimated” the price savings of crucial personnel.
A spokesperson for Allianz stated the allegations were “legally and factually flawed” and the claimants were professional traders who “bought these hedge funds in the expertise that they sought to deliver considerable returns.”
“As was completely disclosed, the funds included pitfalls commensurate with those higher returns,” the spokesperson.
At the finish of March, Allianz liquidated two hedge funds and an offshore feeder fund amid steep losses. In April, Morningstar downgraded the remaining funds citing, “failure in hazard management protocols and the uncertainty.” Allianz, in an internal evaluate, stated the losses were not the outcome of failures in its expenditure method or hazard-management process.
“In the midst of the marketplace downturn, the portfolio management staff took lively steps to cut down the portfolio’s hazard, including by changing then-current positions with additional conservative ones — a restructuring process carried out in past marketplace downturns,” the enterprise stated in a report on its Structured Alpha Portfolio performance.
Allianz disputed Morningstar’s downgrade.
Investors in a single of the funds misplaced 97{312eb768b2a7ccb699e02fa64aff7eccd2b9f51f6a579147b7ed58dbcded82a2}, in accordance to a single lawsuit. Two of the funds had sought returns of 1000 foundation points of alpha.