By Guy Faulconbridge, Kate Holton and Paul Sandle

LONDON (Reuters) – Allianz

CEO Oliver Baete said on Tuesday that European governments needed to be careful about spending record amounts on the COVID-19 crisis as many ordinary people would be angry when they were handed such a vast bill.

The coronavirus pandemic has prompted a debt-fuelled spending splurge by governments across the world as lockdowns batter economies, shred millions of jobs and push whole sectors towards collapse.

The boss of Allianz, which has 2.3 trillion euros under management, said that there were a lot of “zombie” companies being kept afloat with government money though many private households were more resilient than some thought.

Many ordinary people, Baete said, were clearly smarter than the political classes who were spending record amounts of money – an issue that he said could one day hurt social cohesion.

“Our people are apparently much smarter than the political class and I say that with all due respect because … ‘somebody will have to pay the bill’,” Baete told The Wall Street Journal CEO Council.

“How does a society work where one part of the society keeps on spending beyond their own means and others are supposed to pay for that? Polarisation is a very important issue,” he said.

“So we need to be very careful. I don’t believe that this issue is just an economic question: it is actually a question of social cohesion.”

Baete said many financial markets looked irrational at the moment, partly due to excess liquidity and market structure. Allianz, he said, was keeping away from risk in its equity portfolios.


chairwoman Ana Botín said that there were tough times ahead as the world entered in the second wave of the novel coronavirus crisis – and that there could even be a

By Tom Sims

FRANKFURT, Sept 28 (Reuters)Pension funds for truckers, teachers and subway workers have lodged lawsuits in the United States against Germany’s Allianz, one of the world’s top asset managers, for failing to safeguard their investments during the coronavirus market meltdown.

Market panic around the virus that resulted in billions in losses earlier this year scarred many investors, but no other top-tier asset manager is facing such a large number of lawsuits in the United States connected to the turbulence.

In March, Allianz ALVG.DE was forced to shutter two private hedge funds after severe losses, prompting the wave of litigation the company says is “legally and factually flawed”.

Together, the various suits filed in the U.S. Southern District of New York claim investors lost a total of around $4 billion. The fallout has also prompted questions from the U.S. Securities and Exchange Commission, Allianz has said.

A spokesman for Allianz Global Investors said in a statement to Reuters: “While the losses were disappointing, the allegations made by claimants are legally and factually flawed, and we will defend ourselves vigorously against them.”

The plaintiffs are professional investors who bought funds that “involved risks commensurate with those higher returns,” the spokesman added.

The latest claims against Allianz and its asset management arm Allianz Global Investors last week include one from the pension fund for the operator of New York’s transport system, the Metropolitan Transportation Authority (MTA). It has 70,000 employees and made an initial investment of $200 million.

Similar suits have been filed against Allianz by pension funds for the Teamster labor union, Blue Cross and Blue Shield, and Arkansas teachers. The suits are seeking a jury trial to award damages.

The suits allege that Allianz Global Investors, in its Structured Alpha family of funds, strayed from a