Allianz Terminates Two Portfolio Managers After Investment Fund Collapses
From the Desk of Jim Eccleston at Eccleston Law:
Allianz has fired two portfolio managers who monitored a group of investment funds that failed after generating massive losses at the outset of the pandemic, and after the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) announced plans to investigate.
The $15 billion Structured Alpha funds were supervised by Greg Tournant, a portfolio manager who joined Allianz Global Investors in 2002, according to the SEC. The DOJ already had begun investigating the Structured Alpha funds as early as last October for the potential misrepresentation of risk to investors, according to Reuters. Numerous fund investors, including several U.S. public pension funds, have filed suit against Allianz and are seeking a total of $6 billion in damages.
The Allianz funds typically utilized complex options strategies to generate returns. However, the outset of the pandemic sparked market volatility, which caused the funds to suffer severe losses, up to 80% in some cases. Some of the U.S. public pension funds are alleging that Allianz deviated from its proprietary investment strategy of hedging to limit downside risk. Allianz announced last week that it had approved $4.2 billion to be set aside to handle the aftermath, which will reduce compensation for its chief executive as well as other board members and cause the company to suffer a fourth-quarter loss.
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