EXCLUSIVE Allianz under investigation in Germany over investment funds

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The emblem of insurer Allianz SE is seen on the corporate constructing in Puteaux on the monetary and enterprise district of La Protection close to Paris, outdoors Paris, France, Could 14, 2018. REUTERS/Charles Platiau/File Picture

  • German investigation has picked up tempo in current weeks
  • Investigation is throughout a number of BaFin departments
  • Allianz executives outdoors fund division in focus
  • Follows investigations by SEC, DOJ and investor lawsuits

FRANKFURT, Sept 7 (Reuters) – German regulators have launched an investigation into the nation’s greatest monetary firm, Allianz , after the demise of a few of its U.S. funding funds final 12 months, folks with direct information of the matter instructed Reuters.

The transfer heightens the stress on the insurer, which is already going through a slew of investor lawsuits over its Structured Alpha Funds and associated investigations by the U.S. Division of Justice (DOJ) and Securities and Change Fee (SEC).

The German insurer is among the world’s greatest cash managers with 2.4 trillion euros ($2.9 trillion) in belongings underneath administration via bond big Pimco and Allianz International Traders, which managed the funds on the centre of the probes.

The investigation by Germany’s monetary regulator, BaFin, is throughout a number of departments of the establishment, a number of sources mentioned, talking on situation of anonymity because the investigation is ongoing.

BaFin officers are analyzing the extent to which Allianz executives outdoors the fund division had information of, or had been concerned in, occasions main as much as the funds racking up billions of {dollars} of losses, the folks mentioned.

An Allianz spokesperson declined to touch upon the BaFin investigation.

The sources mentioned the German investigation was presently in a fact-finding section and concerned a number of folks, however had picked up tempo since Allianz introduced the DOJ probe on Aug. 1.

The insurer mentioned final month that it had reassessed the dangers associated to the funds after being approached by the DOJ and had concluded that the matter might materially hit its future monetary outcomes.

The assorted investigations and lawsuits revolve round Allianz International Investor’s Structured Alpha Funds, which catered to U.S. pension funds for staff reminiscent of academics and subway workers. The funds had been additionally marketed to European buyers.

After the coronavirus pandemic despatched markets right into a tailspin, the funds plummeted, in some circumstances by 80% or extra.

The losses from unhealthy bets on choices had been so excessive that Allianz closed two funds in March 2020 which had been price $2.3 billion on the finish of 2019. Losses at others precipitated some buyers to withdraw what was left of their cash.

Traders have now lodged 25 lawsuits claiming $6 billion in damages, saying Allianz strayed from its technique of offering draw back safety for market crashes. Allianz’s attorneys have mentioned the buyers had been subtle and conscious of the dangers.

($1 = 0.8428 euros)

Reporting by Tom Sims; Modifying by David Clarke


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