Latest: more troubles for Allianz as class actions pile up, fingers point everywhere

A Blue Cross and Blue Shield Association benefits committee says adviser firm Aon Investments USA that was supposed to help investors vet their risks fell down on his responsibilities while the advisor firm claims a number of executives at Blue Cross failed to do their jobs.

Blue Cross - a federation with more than 100 million customers - had invested US$3 billion into the Allianz funds, which represents 62% of its entire pension portfolio, and has become by far the biggest loser, among the 114 institutions that collectively invested US$11 billion in Structured Alpha funds.

The key question is how and why the Blue Cross pension office ended up investing so much of its portfolio into Structured Alpha funds.

Despite reaching a settlement with Allianz there are hundreds of millions of dollars potentially on the line in upcoming legal fights -  the deal does not cover all the losses at Blue Cross which has sued Aon which in turn has responded by suing five Blue Cross executives.

The key question is how and why the Blue Cross pension office ended up investing so much of its portfolio into Structured Alpha funds.

In a lawsuit filed May 17 in New York federal court (Blue Cross and Blue Shield Association v. Allianz Global Investors U.S. LLC), Aon alleges the Blue Cross chief investment executive, Jamey Sharpe, who is now retired, encouraged the committee that oversees pension investments to repeatedly commit more to Structured Alpha. It also claims he fired a senior employee who disagreed with his strategy.

The executive denies Aon’s allegations and says the lawsuit is baseless.

In the meantime, litigation firms such as Silver Golub & Teitell and Selendy Gay Elsberg have filed Securities Class Action Lawsuits against Allianz Global Investors US in the Southern District of California on behalf of its client and all those ‘who purchased, sold, or liquidated mutual funds shares managed by AllianzGI's Structured Products Group from January 1, 2015 through December 31, 2020’

Bronstein, Gewirtz & Grossman law firm has also notified investors that a class action lawsuit has been filed against Allianz Global Investors U.S. and certain of its officers. The law firms are encouraging investors to inquire about the lead plaintiff position before 25 July.

Swiss adviser partners with venture capitalist to launch fintech AMC

Spiros Margaris (right), a venture capitalist, has announced the launch of a partnership with Swiss financial services company CAT Financial Products (CATFP) to enable investors to invest in global fintech companies. 

The partnership is aimed at leveraging the CAT Financial Products footprint and know-how in the structured products market.

Margaris No.1 Fintech Value Basket is a diversified portfolio wrapped in an actively managed certificate (AMC) of 25 fintech shares with strong growth prospects. Both the investment style and the investment rate can be adjusted to the general market and economic conditions.

The product offers a unique portfolio of shares and seeks to facilitate exposure to companies that ‘will not only shape the future of financial services, but also demonstrate strong and robust business models’, according to Magaris.

HSBC boosts wealth solutions for mass affluent & PB clients in mainland China

HSBC China has announced the expansion of Global Private Banking in mainland China, and the enhancement of services and offerings for its HSBC Premier clients, as part of its strategy to serve the evolving needs of mass affluent and private banking clients in the second largest economy in the world.

Household wealth in mainland China is set to grow by around 8.5% annually from 2021 to 2025 with household investable asset topping RMB300 trillion in 2025, driven by the rising number of HNW individuals and families, and the expansion of the middle income segment to over 500 million.

Global Private Banking plans to hire almost 100 staff, including relationship managers and investment counsellors, by end of this year, and further expand its team size three-fold in the next five years.

The HSBC business has also announced that it will continue to enrich its offering, including structured deposits and overseas mutual funds, as well as introduce succession planning and philanthropy services. HSBC China is the first foreign bank to enable private banking clients to manage their wealth and investments including structured products, local funds, Qualified Domestic Institutional Investor (QDII) fund products and Recognised Hong Kong funds via the bank’s mobile banking app.

‘These investments will further scale up our wealth management capabilities to meet stronger demand for tailored investment solutions, professional advisory services on asset allocation and diversification, as well as international banking amongst mass affluent and private banking clients in mainland China, said Nuno Matos (above-right), chief executive officer, Wealth and Personal Banking, HSBC.

Multi-issuer platform Goldhorse signs UOB Kay Hian

Goldhorse, a Hong Kong fintech company specializing in financial products, has been selected by UOB Kay Hian Hong Kong, a top brokerage firm in Asia, to provide a series of customised tools and financial services for the expansion of its structured product business.

Raymond Lam, executive director at UOB Kay Hian Hong Kong, said the firm is seeking to improve its capabilities to offer ‘seamless access to structured products information’, with sophisticated tools and technology to enable investors the ‘capability of trading across a broad range of structured products, such as Equity Linked Notes and Accumulators/Decumulators’.

Long Lee (right), CEO of Goldhorse said the firm’s platform Extramile is allowing ‘deal-makers back to the driver seat’ as well as turning data into information, ‘which can be easily shared between teams, colleagues, and most importantly, clients’.

Goldhorse’s Extramile multi-issuer platform, targeted at external asset managers (EAMs), was launched in late 2020 and supports lifecycle and sales management, record keeping, research reports as well as product advisory.

HSTECH futures index deployed in new ETN

Hang Seng Indexes Company has licensed the HSTECH Futures Index to President Securities Corporation to serve as the underlying index for the creation of an exchange-traded note (ETN) - President HSTECH Futures Index ETN. The ETN was listed on the Taipei Exchange on 25 May 2022.

The HSTECH Futures Index aims to reflect the performance of a portfolio which holds a single Hang Seng TECH Index futures contract that rolls on a monthly basis. By purchasing a single futures contract, the HSTECH Futures Index is designed to be a novel and cost-effective way to replicate the performance of the underlying index.

The new ETN will bring the number of exchange-traded products linked to indexes in the Hang Seng Family of Indexes to 112 – with listings on 16 different stock exchanges across the world. As of 30 April 2022, AUM in products passively tracking indexes in the Hang Seng Family of Indexes had reached a total of about USD37.72 billion.

The index provider has also launched the Hang Seng China Metaverse Index and the Hang Seng Shanghai-Shenzhen-Hong Kong Genomics and Oncology Index, as the newest additions of its Megatrend Index Series.

The index universe for each of the two indexes covers stocks listed in Shanghai, Shenzhen and Hong Kong. The two new indexes, which are calculated and disseminated in real-time at two second intervals, add to the Hang Seng Shanghai-Shenzhen-Hong Kong E-Commerce Index, Hang Seng Shanghai-Shenzhen-Hong Kong NextGen Communications Index, and Hang Seng Shanghai-Shenzhen-Hong Kong Generation Z Index.

Image: Elnur AdobeStock.