Alecta has pushed out its head of equities after Sweden’s largest pension fund got burned for nearly $2 billion when last month’s bank failures decimated its investments in Silicon Valley Bank, First Republic Bank and Signature Bank.
The $108 billion pension fund said it suffered losses of SEK19.6 billion ($1.9 billion) after the collapse of Silicon Valley Bank shook confidence in U.S. regional banks. Head of Equity Liselott Ledin, who has been with Alecta for more than 28 years, was placed on leave, the firm announced this week.
“The losses in the three American banks account for a small part of Alecta’s capital and the impact on the customers’ pensions is very limited. But it has seriously damaged the customers’ trust in Alecta and our share management,” Alecta CEO Magnus Billing said in a statement. “It is now up to us to prove that we deserve their trust again. Alecta’s share management needs a fresh start and new management.”
Alecta named Ann Grevelius as acting head of equity, beginning April 20. Grevelius, co-founder and chairman of Swedish financial firm Optise AB, is also currently a member of Alecta’s board. She will step down from the board when she assumes her new role. The pension fund announced it has already begun a search for a permanent equity manager.
Billings added that the investments in the banks “gave very good returns for several years, but in retrospect proved to be a failure.” He has been tasked by the pension fund’s board with investigating “whether the current investment strategy, risk allocation and mandate for asset management is optimal.” He said he will use external resources for the investigation, which is expected to be completed before the summer, and that the conclusions will be made public.
Billing also said he decided to reduce the pension fund’s risk by cutting high-ownership stakes in individual companies “far from our home market” immediately, with a focus on its U.S.-based investments.
The pension fund also announced that its head of asset management, Henrik Gade Jepsen, has been placed on long-term sick leave due to serious illness from COVID-19. However, Alecta’s announcement said he is expected to fully recover and be back at work after the summer. Kerim Kaskal, a former Alecta CIO, has been named acting head of asset management during Jepsen’s absence.
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Tags: Alecta, Ann Grevelius, Equities, First Republic Bank, Henrik Gade Jepsen, Kerim Kaskal, Liselott Ledin, Magnus Billing, Pension Fund, Signature Bank, Silicon Valley Bank, Sweden