Allianz board member Hunt after hedge fund affair before the end

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Jacqueline Hunt: There is a risk of leaving the Allianz Board of Management

Photo: Thomas Einberger / imago images / argum

At the Munich insurance giant Allianz, board member Jacqueline Hunt is facing premature end in the course of the likely billion-dollar affair over losses of Allianz hedge funds. The alliance is considering "the succession planning for their board to move forward," announced the group on Monday. This also concerns the asset management division, "which is currently facing particular challenges due to the structured alpha issue in the USA". The 53-year-old's contract expires in the coming year anyway.

The "Wall Street Journal" (WSJ) reported on Monday that Hunt was already negotiating an early exit. manager magazin had already reported at the end of August that the pressure on Hunt because of the hedge fund affair was growing and that a restructuring of the board was imminent. Allianz boss Bäte had hushed up the allegations externally for months and belittled them internally. That the number of plaintiffs and the amount of compensation rose steadily, that the US Securities and Exchange Commission had been investigating for a year and the Department of Justice (DOJ) had already sent initial inquiries to Munich in May: it doesn't matter. The financial supervisory authority Bafin has now also started investigations.

Hunt is given at least part of the responsibility for the debacle that wealth management subsidiary Allianz Global Investors (AllianzGI) suffered with hedge funds.

Around 25 institutional investors in the USA - including pension funds for government employees - have sued Allianz for six billion dollars because they lost a large part of their stake in the spring of 2020 with the risky but allegedly crisis-proof paper.

You accuse Allianz of deviating from its investment strategy in view of the temporary panic in the markets.

No provisions have yet been made

Allianz has not set up any provisions so far, but has already warned of considerable negative effects on earnings.

According to its own information, it also checks the "risk and compliance processes in relation to the Structured Alpha Funds, which belong to the Asset Management division".

Hunt has been on the Allianz board of directors for the two asset management subsidiaries Pimco and AllianzGI since 2016.

However, Pimco enjoys a relatively large degree of autonomy within the group as long as the Californians reliably deliver their profits in Munich.

The smaller, Frankfurt-based AllianzGI is actually mainly known in Germany for mutual funds, hedge funds such as the "Structured Alpha" family sold in the USA are more of a fringe business for them.

According to the "Wall Street Journal" Hunt wanted to leave before the US Department of Justice became aware of the "Structured Alpha" funds in May. Over time, divergences about the corporate culture have accumulated, the newspaper quoted a person familiar with the talks. The time of their departure is still unclear. Hunt had already had her contract extended by three instead of the usual five years in 2019. According to the newspaper, a successor is already available, but this has yet to be confirmed by the financial supervisory authority BaFin. Allianz announced that the board of directors would deal with the succession plans at its next regular meeting on September 30th.

In 2022, not only Hunt's contract expires, but also that of her board colleague Sergio Balbinot, who is responsible for southern and western Europe, among other things.

After CEO Oliver Bäte, he is the longest-serving member of the board and has already exceeded the age limit of 62 years.

la / reuters