Teachers pension fund sues AllianzGI over Covid-induced losses

'Reckless strategy'

An Arkansas-based teachers pension fund has sued Allianz Global Investors for costing retirees in the scheme approximately $800m so far this year in what it has described as a "reckless strategy".

The Arkansas Teacher Retirement System claims that AllianzGI's 'market-neutral' Structured Alpha funds put bets in place earlier in the year against the S&P 500 index falling further as the pandemic began to rear its head, shortly before it tumbled 8.5% in February then by a further 12.5% in March.   The pension fund claims that, by doubling down on unprofitable trades, Allianz's investors became "dangerously exposed to even the slightest increase in market volatility or decline in equity prices", despite the vehicles being advertised as being able to protect investors during falling mar...