Magnus Billing, CEO of Sweden’s largest pension fund, Alecta, said last week that the fund “needs a fresh start and new management” following revelations that it lost $2 billion to recent bank failures in the U.S.
The pension’s board agreed and this week fired him “with immediate effect.”
Deputy CEO Katarina Thorslund has been appointed acting CEO, effective immediately, as the pension fund launches a search for a permanent successor.
Last month, the pension fund revealed that it lost 19.6 billion Swedish krona ($1.9 billion) when its investments in Silicon Valley Bank, Signature Bank and First Republic Bank were decimated by banking failures. The pension fund says it has since tried to isolate the losses and work through the processes within asset management to understand what went wrong.
Alecta says it first invested in Silicon Valley Bank in June 2019 and made its last investment in November for a total of SEK 8.9 billion. It made its first investment in Signature Bank in January 2016 and made the last investment last July for a total of SEK 3.2 billion.
“As a first step, the company’s management has, with the help of its control functions, made the assessment that the current investment decisions were within the framework and mandate established by the board,” the pension fund said in a release. “The decision on measures to strengthen capital management taken by the CEO, and which was communicated last week, has the board’s full support.”
Nevertheless, the board decided that the pension fund needed new leadership to implement the changes and let Billings go, as the losses “have seriously damaged confidence in Alecta’s asset management.” Board chair Ingrid Bonde offered to step down but was “urged by the board” to remain.
Ann Grevelius, who last week was named acting head of equity after Liselott Ledin was placed on leave, will lead a strategic review of how Alecta will conduct equity management in the future.
“We would like to thank CEO Magnus Billing for the solid work he has put in during his time at Alecta for the good of the company and the customers,” Bondesaid in a statement. “At the same time, Alecta now needs to look ahead and forcefully implement the necessary changes.”
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Tags: Alecta, banking crisis, CEO, chief executive officer, First Republic Bank, Katarina Thorslund, Magnus Billing, Pension Fund, Signature Bank, Silicon Valley Bank, Sweden