Lehigh has filed a lawsuit seeking more than $62 million from the investment firm AllianzGI.
The university had invested endowment funds with Allianz based on the firm’s “market-agnostic” strategy with “stringent risk controls to limit losses,” said Lori Friedman, Lehigh’s director of media relations. Market-agnostic means to be unbiased in the approach taken to solve a business or financial problem, according to Forex Education.
Lehigh alleges in its lawsuit, however, that Allianz “abandoned” its strategy by making a “high-risk bet on the direction and volatility of the markets.” Lehigh’s lawsuit alleges Allianz abandoned its strategy as COVID-19 impacted the stock market.
Lehigh is seeking to “recover its losses” based on the alleged mismanagement of the university’s investments.
Between 2013 and 2019, Lehigh said in its lawsuit that it had invested $67 million in AllianzGI — close to 5 percent of its total $1.4 billion endowment. During the first quarter of 2020, Lehigh alleges Allianz had wiped out $62 million of its $67 million investment through a combination of “misrepresentation and negligence.” The university said in its lawsuit it was expecting the investment to provide a “modest incremental return.”
Lehigh alleges two of the university’s funds that it invested with AllianzGI had declined nearly 19 percent each in February 2020 — well outpacing the general stock market declines of 9 percent in that month due to the pandemic.
Lehigh filed its lawsuit in the Southern District of New York and is demanding a trial by jury.