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A few days before the next balance sheet press conference, Allianz boss
Oliver Bäte
warns of apparently significantly higher burdens that the group could face
Photo: CHRISTOF STACHE / AFP
The US Department of Justice has intervened in the multi-billion dollar dispute between Allianz and US pension funds over losses in the Corona crisis. The board of the Munich insurance group now fears that the lawsuits and possible penalties could be more expensive than expected. It "came to the conclusion that there is a relevant risk that the matters related to the 'Structured Alpha Fund' could have a significant impact on future financial results of Allianz," admitted Allianz boss
Oliver Bäte
(56) on Sunday evening.
At its peak, Allianz shares lost more than 6 percent to around 198 euros on Monday, making them the weakest value in the Dax.
The group nevertheless waived a provision because the impending costs could not be estimated precisely enough, it said in the message.
Allianz will present its business figures for the second quarter this coming Friday.
It is aiming for an operating profit of eleven to 13 billion euros for the current year.
Claims of six billion dollars are in the room
The anger over the funds is testament to the Wall Street practices of the alliance under Bäte.
The proceedings are likely to drag on for years.
The disputes are already damaging the reputation on the important US market.
The proceedings concern hedge funds that Allianz Global Investors (AllianzGI) launched under the name "Structured Alpha Fund".
The shares suffered massive losses in the downturn in the markets at the beginning of the Corona crisis in spring 2020, and AllianzGI even liquidated two of the funds afterwards.
Several large investors from the USA had sued Allianz, the claims for damages now add up to almost six billion dollars.
In the summer of 2020, the US securities regulator, the SEC, got involved and requested information about the funds from AllianzGI.
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Now, according to Allianz, the Ministry of Justice (DOJ) has also initiated an investigation and requested information.
"The alliance is cooperating fully with the SEC and the DOJ in their investigations and has immediately initiated its own review of the matter," the statement said.
US Department of Justice steps in
In addition to the pension fund for teachers in the US state of Arkansas (ATRS), the plaintiffs also include the fund for the 70,000 employees of the operator of the New York transport company, the Metropolitan Transport Authority (MTA).
You accuse AllianzGI of deliberately deviating from the strategy of protecting the funds with options against a short-term crash in the financial markets.
A spokesman had rejected the allegations as "legally and factually incorrect".
After all, the pension funds are professional investors who have bought funds with a higher risk-return profile.
These should bring up to ten percent higher returns than the S&P 500 index.
With one of the funds, investors suffered a loss of 97 percent, according to the lawsuits.
In its own investigation, AllianzGI had come to the conclusion that the losses "were not the result of a flawed portfolio investment strategy or errors in risk management".
rei / Reuters / dpa-afx
