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NEW YORK (Legal Newsline) – An investment firm is again accused of squandering a client's money during the early stages of the COVID-19 pandemic.
The Employees’ Retirement System of the City of Milwaukee filed suit Oct. 16 in New York federal court against Allianz Global Investors and related companies.
The suit follows Lehigh University’s, which claimed Allianz abandoned the agreed-upon investment strategy and lost more than $60 million of its money.
“Rather than protect against the market downturn that Allianz’s own chief economist had been warning about since January 2020 by ensuring the Funds remained market neutral and contained the ‘tail risk’ hedging positions that were supposed to be the ‘cornerstone’ of the Alpha Fund strategy, AllianzGI positioned the Funds’ portfolios in a manner that all but guaranteed substantial losses once that downturn came to pass,” Milwaukee’s lawsuit says.
“AllianzGI did not simply make a bad call in the midst of a market disruption: it abandoned the Funds’ investment mandate—repeatedly touted by Allianz and memorialized in contracts with CMERS—that the risk management and investment strategies employed by AllianzGI were designed to protect the Alpha Funds’ investors against precisely the types of market conditions experienced in February and March of 2020.”
Bernstein Litowitz is representing the Milwaukee pension fund, which says it lost at least $286 million in the first three months of 2020.