Alecta CEO Steps Down as the Pension Fund Launches Strategic Review
Following $2 billion in losses on individual U.S. bank investments, the Swedish fund is making changes.
In the wake of losses driven by the American banking crisis, Swedish pension fund Alecta’s CEO is stepping down. The fund is also launching a strategic review of its equities portfolio.
Magnus Billing, who had served as the CEO at Alecta since 2016, has stepped down from his post, effective immediately. Alecta has appointed deputy CEO Katarina Thorslund as acting CEO, and the pension fund has started a recruiting process for Billing’s official replacement.
Alecta, which as of March 10 managed roughly 1,200 billion Swedish kroner ($115 billion USD), announced roughly a week ago that it had lost a total of 19.6 billion kroner because of the banking crisis.
The pension fund revealed in March that it had taken a hit on its U.S. bank holdings after Silicon Valley Bank and Signature Bank were shut down, sparking a broader downturn in the mid-size banking industry stateside.
The pension fund also shared in March that it had held a position in Signature Bank since January 2016. After Alecta made its final investment in July 2022, the total sum allocated to the fund was 3.2 billion kroner. Its position in venture darling Silicon Valley Bank, meanwhile, was opened in June 2019. Alecta’s final investment in SVB was made in November 2022, with a total investment of 8.9 billion kroner.
These positions amounted to 1 percent of the fund’s total portfolio in March.
Both investments were written down to zero in mid-March, when the Federal Deposit Insurance Corporation (FDIC) took control of Signature and SVB. That decision followed a flurry of depositors pulling their money out of each bank due to concerns about solvency. While the FDIC was able to guarantee depositor assets up to $250,000 per account, both stocks became worthless.
As Signature and SVB were wound down, First Republic Bank, which has operations similar to SVB and Signature, experienced significant market losses due to investor fears that the bank would be the next to collapse. While that didn’t come to fruition, Alecta also lost money on its First Republic holdings, which amounted to a total investment of 9.7 billion kroner. These losses were revealed in early April.
In the wake of these losses, Alecta has launched a strategic review of how it conducts its equity investment management. Ann Grevelius, who will take over as acting head of equity on April 20, is leading the review. She replaces Liselott Ledin, who stepped down in early April.
Along with the announcement of Ledin’s departure, Billing said on April 4 that Alecta would reduce any large equity positions in individual companies abroad, with a focus on American companies.