Sweden’s Top Pension Fund Fires CEO After SVB, Signature Bank Losses
In a move to regain investor faith, Sweden’s biggest pension fund has kicked out its CEO, “with immediate effect,” after losing $2 billion on Silicon Valley Bank and Signature Bank.
Alecta announced on Tuesday that Magnus Billing would no longer be its chief executive. Under his leadership, the Swedish pension fund became one of the biggest losers in the recent banking crisis in the US. The fund was a shareholder in SVB and Signature, two of the three largest banking failures in the US. Billing was Alecta’s chief executive for seven years.
The Swedish pension fund also held shares in First Republic Bank, and suffered a staggering loss of $728 million after a self-off when the bank also very nearly fell into the banking sinkhole.
“The losses have seriously damaged confidence in Alecta’s asset management,” the Swedish pension said in an official statement. “The board has now come to the conclusion that Alecta needs new leadership to implement the necessary changes in asset management and restore trust.”
The occupational pension fund, which has about $115 billion of assets under management, has appointed deputy CEO Katarina Thorslund as interim chief until a permanent replacement is named.
Its chair Ingrid Bonde told Financial Times that Alecta will review its current model of focusing investments in a few stocks, the same strategy that has pushed them to become the best-performing pension fund in Sweden.
The losses have also brought Alecta to the examination table of Sweden’s financial regulator. The pension fund had previously and very unfortunately touted that it had dropped its position in a conservative Swedish lender in favor of higher returns on US niche banks.
“We need to look at the balance between improving returns and restoring trust,” Borne said.
Last week, the board also cut its head of equities Liselott Ledin. Her post will be taken over by Ann Grevelius, a member of the board who is also formerly the chief investment officer at SEB.
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