After complaints from 25 major investors against the group subsidiary Allianz Global Investors (AGI), the insurance group is under pressure.
(Photo: dpa)
Munich The alliance is facing important personnel decisions. When the board of directors, chaired by Michael Diekmann, meets on Thursday, four of the ten board members will examine a contract extension.
Particularly in focus: the successor to board member Jacqueline Hunt, who is responsible for asset management, among other things. Hunt’s departure before the end of her contract, which runs until the end of 2022, is considered certain after 25 major investors have sued the group subsidiary Allianz Global Investors (AGI). In the USA, therefore, there is a risk of damage payments amounting to billions.
It is not yet officially known who will take over her position. Many observers in the company expect an external top manager. CEO Oliver Bäte recently emphasized Allianz’s pioneering role in the women’s quota. Out of ten board members, seven are currently male and three are female. Should Hunt be eliminated, the quota could be kept constant by a successor.
Internally, a candidate from the Anglo-Saxon area is expected. This is due to the nature of the position, which includes responsibility for the two asset managers Pimco and AGI as well as the US life insurance business. The fund provider Pimco, which is considered one of the largest and now again most successful bond investors in the world, is based in Newport Beach, California, with around 3,000 employees. The Allianz subsidiary is considered self-confident and independent in the group, and good advice from Munich is not valued. After all, Pimco contributes almost 80 percent to the company’s total asset management.
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The significantly smaller AGI in Frankfurt, whose funds are well known to private investors in this country, currently also has its biggest problems in the USA. A fringe area in which institutional investors such as pension funds have been offered hedge funds since 2005 came under massive pressure with its highly speculative products at the beginning of the corona crisis. Some funds had to be liquidated, the damage is immense.
Portfolio should become more sustainable
Whoever succeeds Jacqueline Hunt has only limited responsibility for dealing with the damage. CEO Bäte has now made the incident a top priority. Hunt’s successor would also be involved, but at least as important is the future direction of asset management with the focus on restructuring the portfolio towards sustainability.
After the group had already committed itself to the goal of climate neutrality by 2050 around two years ago, an ambitious interim goal was added at the beginning of this year. Emissions from selected portfolios of stocks and corporate bonds are now expected to fall by 25 percent by 2025 compared to 2019.
However, the successor to Jacqueline Hunt might not be the only change on the Allianz board of directors. Sergio Balbinot, who has been responsible for the markets in Western and Southern Europe and the Asia / Pacific region on the Management Board since 2015, exceeded the Group’s internal age limit of 62 when he turned 63 at the beginning of September. Another year is conceivable in which Balbinot could still lead the division. But it is also possible to take a step into retirement.
Balbinot is very valued by CEO Bäte and the supervisory board. Last year he received the second-best rating on the board of directors behind Bäte from the supervisory board.
Promising internal candidate
In-house, the name Joachim Müller has been among the ranks of potential candidates for promotion to the board for a long time. The Swabian has been responsible for the long-loss-making industrial division AGCS since the end of 2019 and has even managed to return to the black this year.
Even when he joined AGCS, the job was a yardstick for Müller’s further career in the company. Before that, Müller turned sales into a profitable unit at the German Allianz subsidiary. It is questionable, however, whether supervisory board chairman Diekmann sees Müller’s work at AGCS as finished or whether he wants to wait for the long-term loss-maker to return, according to the group.
In addition to Hunt and Balbinot, the contracts of the two board members Renate Wagner and Klaus-Peter Röhler are also pending review on Thursday. In both cases, the extension is a matter of form – although both will lose part of their previous duties in the coming year. In addition to his role on the corporate board, Röhler is also head of Allianz Germany. Among other things, Wagner is responsible for personnel issues on the board. With the end of Allianz Germany in its current form, announced in the spring, both positions are no longer applicable.
Both Röhler and Wagner are increasingly challenged elsewhere. In addition to the insurance business in German-speaking countries, Röhler is also responsible for the countries in Central and Eastern Europe. After the Polish business of the competitor Aviva was taken over in the spring, Röhler now has to ensure that the alliance there is far more than just a marginal phenomenon there in the future. In addition to personnel issues, Wagner is responsible for a broad portfolio of law, compliance, mergers and acquisitions. The tasks in each area are likely to increase in the future.
More: Allianz board member Hunt after the hedge fund affair probably before the end