Teamster Members Retirement Plan, Carol Stream, Ill., Fairfield (Conn.) Police and Firemen's Retirement System and New England Health Care Employees Pension Fund, Hartford, Conn., dropped their consolidated class-action lawsuit against Allianz Global Investors that alleged mismanagement of enhanced-return strategies the firm managed.
The plans, board of trustees and selected participants dropped the consolidated lawsuit Tuesday in U.S. District Court in New York after reaching "settlements disposing of all claims" against the money manager, according to the court filing.
The amounts of the settlements were not disclosed.
The original lawsuits were all filed in 2020 as a result of losses incurred by AllianzGI's Structured Alpha strategies in February and March 2020 during the extreme market downturn that greeted the beginning of the COVID-19 pandemic.
The Allianz Structured Alpha strategies historically had been designed to identify "areas of systematic disagreement with option prices about the probability distribution of future index moves," according to a September 2016 AllianzGI presentation.
The teamster plan's lawsuit, filed in September 2020, specifically said that when equity markets became volatile in late February and early March of that year, the defendants abandoned the fund's risk controls and "recklessly 'rolled the dice' in the hope that adverse market trends would quickly reverse course before the fund would have to recognize devastating losses," court documents said.
As of Dec. 31, 2020, New England Health Care Employees Pension Fund and Teamster Members Retirement Plan had $911 million and $837 million in assets, respectively, according to their most recent Form 5500 filings. The asset size of the Fairfield system was not immediately available.
William C. Fredericks, partner at Scott + Scott Attorneys at Law, attorneys for the Teamsters plan; David S. Golub, partner at Silver Golub & Teitell, attorneys for the Fairfield and New England Health Care plans; and John Wallace, AllianzGI spokesman, could not be immediately reached for comment.
A dozen pension funds and other institutional investors filed lawsuits against AllianzGI in 2020, and settlements have gradually been announced since February when the manager's parent company Allianz Group said it was setting aside €3.7 billion ($4 billion) to cover expected settlements with U.S. investors and government officials over the collapse of its Structured Alpha funds. Raytheon Technologies Corp., Waltham, Mass., and Blue Cross Blue Shield's national employee benefits committee were the first to announce on Feb. 28 they had dropped lawsuits after reaching undisclosed settlements.
