The J. Paul Getty Trust, which operates the Getty Center and Getty Villa in Los Angeles, is suing financial services giant Allianz after it lost tens of millions of dollars following alleged mismanagement of its trust fund. investment.

Most financial investors in US or international stock markets recognize the potential for volatility and accept the risk of loss. However, the Getty claims Allianz abandoned the hedging strategy that was promised as the fund‘s “cornerstone,” “leaving the portfolio almost entirely unhedged against a spike in market volatility,” according to the lawsuit. filed in the United States District Court for the Southern District of New York.

AllianzGI, a division of global investors named in the lawsuit, allegedly assured investors that the hedges in place would contain losses up to a “defined maximum loss” and provide “protection” against a stock market crash, according to court documents.

The Getty invested $60 million in the fund, titled “structured alpha,” in 2016. Three years later, the investment had grown to $73 million. But in early 2020, when the pandemic hit, the fund suffered devastating losses: The Getty was down to just $2 million, or “97% of its assets.”

The Getty said it had followed Allianz’s structured alpha funds closely before investing and believed its approach was a good fit for the risk profile it was looking for.

No more Neither Allianz nor the Getty immediately responded to requests for comment.

The Getty said its endowment had about $9.2 billion in portfolio assets at the end of the calendar year.

Meanwhile, the Allianz group would be set aside $4.2 billion to cover expected settlements with U.S. investors and government officials in this regard. Structured alpha funds eventually collapsed.

A dozen public pension funds and other institutional investors sued AllianzGI in 2020 for alleged mismanagement, including Arkansas Teachers’ Retirement System, Raytheon Technologies, and National Employee Benefits Committee Blue Cross Blue Shield.

The Department of Justice and the Securities and Exchange Commission have launched their own investigations.

To follow Artnet News on Facebook:


Want to stay one step ahead of the art world? Subscribe to our newsletter to receive breaking news, revealing interviews and incisive reviews that move the conversation forward.