Swedish pension fund Alecta announced Tuesday that it returned 7.7% in the first half of 2024, amidst a probe from the country’s financial regulators into the fund’s previous investments losses, which included several failed U.S. regional banks.
Assets of the fund grew to 1.31 trillion Swedish kronor ($126 billion) at the end of the second quarter. Strong performance came from equities, which returned 12.9% in the period.
In 2023, Alecta lost more than $2 billion, including losses from the fund’s investments in several U.S. regional banks which collapsed last year, including Silicon Valley Bank and First Republic Bank. The fund was also scrutinized for its stake in Heimstaden Bostad, a Scandinavian real estate group through which the fund suffered a $1.2 billion loss.
The fund’s series of losses led to the firing and resignation of several key executives and to a probe from Sweden’s Financial Supervisory Authority, which claimed that Alecta broke a number of regulations when making investments in the failed businesses. At the end of June, Alecta received a letter with preliminary assessments from the FSA, to which the fund scheduled a response by September 6.
“We have worked intensively on developing and implementing improvement measures to strengthen Alecta, while at the same time continuing to deliver high quality in the day-to-day operations for the benefit of the customers,” said Alecta CEO Peder Hasslev in a translated statement. “During the first half of 2024, the yield was competitive.”
Alecta, the largest pension fund in Sweden, manages retirement benefits for 2.8 million beneficiaries, more than one-quarter of the country’s population.
Related Stories:
Alecta Reports 5.9% Q1 Return After Losing Billions on Regional Banks
Alecta Board Chair Ingrid Bonde Resigns
Alecta Fires CEO as Fallout Continues From $2 Billion Banking Losses
Tags: Alecta, Peder Hassley, Pensions, Sweden