Alecta

Alecta is Sweden's largest pension fund for 2023.

2023: Losses of $2 billion from failed investments in bankrupt banks in the United States; CEO firing

In April 2023, it became known that Sweden's largest pension fund Alecta suffered losses of almost $2 billion as a result of an unsuccessful investment strategy that made it one of the largest shareholders in two American banks that collapsed in March 2023 and another bank involved in the ongoing banking crisis.

The scale of the losses became more apparent after the private pension group sold its entire stake to First Republic Bank for a loss of 7.5 billion crowns ($728 million). This adds to expected losses of 8.9 billion kronor and 3.2 billion kronor at Silicon Valley Bank and Signature Bank, respectively.

Alecta office in Sweden

On April 11, 2023, the Alecta Foundation announced the dismissal of CEO Magnus Billing. He will leave his post immediately due to large losses as a result of a failed investment in Silicon Valley Bank.

Alecta's financial losses are reportedly linked to the US banking crisis. The fund was one of the largest shareholders in First Republic Bank, Signature Bank and SVB Financial Group, the parent company of Silicon Valley Bank. However, both Signature Bank and Silicon Valley Bank collapsed, while First Republic Bank had considerable difficulties. Against this background, the Alecta pension fund lost almost $2 billion.

Alecta said in an official statement that the fund's board was working intensively to find a way out of the current situation. The decision was made to reshuffle the top leadership: Billing will leave the post of CEO. Deputy CEO Katarina Thorslund is appointed Acting CEO with immediate effect. She will hold this position until the fund selects a new permanent leader.

Billing, who acknowledged that investing in American banks was a "big setback," repeatedly tried to downplay the losses, saying they made up less than 2% of the fund's capital. However, the Swedish National Organization of Pensioners indicated that lost funds are "people's wages," and any losses should be taken seriously. Prior to joining Alecta as CEO, Billing led Nasdaq Inc. operations in Northern Europe, including exchanges in Sweden, Denmark, Finland, Iceland and the Baltic States. He also managed the Stockholm Stock Exchange.^[1]

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