Recovery of Investment Losses in AllianzGI’s Structured Alpha Funds

Morgan & Morgan’s securities attorneys are investigating claims involving losses in AllianzGI’s “Structured Alpha” funds.

Many of the Structured Alpha funds have suffered catastrophic losses this year, according to reports. AllianzGI has been accused of failing to use appropriate risk controls and hedging strategies to protect investors, even though AllianzGI touted the Structured Alpha funds’ ability to endure extreme market volatility.

For example, the offering documents for AllianzGI’s Structured Alpha US Equity 500 hedge fund state that the fund’s investment strategy was “designed to outperform whether equity markets are up or down, smooth or volatile.” In early 2020, AllianzGI allegedly told investors the fund was positioned well if an extreme correction occurred or volatility spiked, according to reports.

But when equity markets crashed in February and March, AllianzGI allegedly failed to properly re-balance or hedge positions. It also allegedly failed to reduce leverage.

AllianzGI’s failure to protect investors allegedly may have been due to the fund’s fee structure, as AllianzGI only earned fees if the fund out-performed the S&P 500.  AllianzGI allegedly could have protected investors against a market correction earlier this year, but would have had to lock in small losses to do so.  Incurring losses, however, may have meant that AllianzGI would not have been entitled to fees.  So instead of paying for protective measures, AllianzGI allegedly crossed its fingers that markets would simply turn in the fund’s favor without having to pay for measures to reduce risk exposure.

AllianzGI’s alleged failure to take protective measures left the fund exposed to catastrophic losses. By late March, the fund allegedly had incurred losses of more than 75%, totaling over $900 million.

AllianzGI’s parent company, Allianz SE, recently disclosed that the SEC has sent an information request regarding the Structured Alpha funds.

If you have suffered losses relating to AllianzGI’s Structured Alpha funds, we are here to help. Our experienced securities attorneys in the Business Trial Group have helped investors recover tens of millions of dollars of investment losses.

Morgan & Morgan’s Business Trial Group helps investors recover their losses on a contingency basis. We are only paid if we successfully recover money for you.  The Business Trial Group is part of the largest contingency law firm in the nation, with over 700 lawyers and offices nationwide.

Contact us today at 888-610-6714 or online for a free case evaluation.