At the insurance group Allianz, board member Jacqueline Hunt is facing premature end in the course of the affair over losses of Allianz hedge funds in the corona crisis. 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.
That Wall Street Journal reported that Hunt was already negotiating an early exit. The American is given at least part of the responsibility for the debacle that the asset management subsidiary Allianz Global Investors (AllianzGI) suffered with the 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.
The losses also prompted regulators in the US and Germany and the US Department of Justice to act. 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 Management for the two asset management subsidiaries Pimco and Allianz GI 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 Allianz GI is actually primarily 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 apparently wanted to leave the alliance before the US Department of Justice became aware of the “Structured Alpha” funds in May. Over time, divergences about the corporate culture have accumulated.