Allianz SE is nearing settlements with major investors in its ill-starred Structured Alpha Funds, which collapsed in the Covid-related market crash of early 2020, Bloomberg reported Friday.
«We achieved an agreement with the majority of the investors,» Chief Financial Officer Giulio Terzariol said in an interview on Bloomberg TV Friday, according to the report. «There are still ongoing conversations with remaining plaintiffs. We are in conversations with the [U.S. Department of Justice (DOJ)], and this conversation is very constructive.»
The German insurer is facing multiple lawsuits and regulatory investigations tied to the collapse, and said last week it would take a €3.7 billion charge, the report said, noting it resulted in a €292 million loss for the fourth quarter. Allianz said it couldn’t yet provide the total cost because it’s still in talks with other plaintiffs and the U.S. Securities and Exchange Commission (SEC) and DOJ.
Investors in the funds included Blue Cross & Blue Shield and New York's Metropolitan Transportation Authority as well as pension funds, the report said. The lawsuits allege the funds failed to follow the stated investment mandates and downside protections, and then took on risky strategies some plaintiffs described as a gamble, in an effort to win it back, the report said.
Allianz has told a court, in its defence, that the plaintiffs are sophisticated investors who knowingly choosing high risk private funds, the report said.
