Allianz Fires Fund Managers After Multibillion-Dollar Blowup

(Bloomberg) —

Most Read from Bloomberg

Allianz SE dismissed two people responsible for managing a suite of hedge funds that allegedly lost investors billions of dollars and prompted probes by U.S. regulators.

Greg Tournant and Stephen Bond-Nelson, who managed the Florida-based Structured Alpha hedge funds for Allianz Global Investors, were dismissed in December, regulatory filings show. A third manager involved in running the funds, Trevor Taylor, left at the same time, a person familiar with the matter said.

Tournant was “discharged for violation of firm policies designed to ensure compliance with industry regulations and standards relating to the preparation and provision of client communications,” while Bond-Nelson’s position was terminated for a “violation of firm compliance policies,” regulatory filings show. It isn’t clear why Taylor departed.

Tournant didn’t respond to a request for comment from Bloomberg News via LinkedIn. Calls and messages to phone numbers and email addresses listed as linked to him in a public database were unsuccessful. Bond-Nelson, Taylor and an AGI spokesman declined to comment.

Their departures are the latest in a series of fund-manager exits at the insurance giant. Late last year, Allianz SE’s top asset-management executive, Jackie Hunt, also stepped down.

Read More: Allianz Asset Head Leaves Amid Multiple Probes, Lawsuits (3)

The firm said on Thursday that it was taking a 3.7 billion-euro ($4.2 billion) charge to cover a settlement reached with some investors in these funds, and other related costs.

Investors — including public pension fund Arkansas Teacher Retirement System and New York’s Metropolitan Transportation Authority — said they collectively lost billions of dollars from the collapse of the hedge funds, which were set up to profit from volatility yet incurred huge losses during the early days of the pandemic. Allianz liquidated two of the vehicles in March 2020 and has been unwinding the others.

The pain isn’t expected to end there.

Allianz has warned that probes by the U.S. Securities and Exchange Commission and Department of Justice are ongoing and further charges are likely.