Alecta, Sweden's largest pension fund, has fired its CEO, Magnus Billing, "with immediate effect" after the company lost almost $2 billion on investments in Silicon Valley Bank and Signature Bank, two of the three largest banking failures in U.S. history. The losses have damaged confidence in Alecta's asset management, and the company is looking to restore trust with a leadership change. Alecta began buying shares in the three American banks in 2017 and increased its holdings in the following years.
Swedish pension fund Alecta, the fifth-largest shareholder in First Republic Bank, has sold its shares in the struggling American bank due to uncertainty about its future after being downgraded to junk status. Alecta took a loss of $728 million on the sale, on top of losses from the collapses of Silicon Valley Bank and Signature Bank. The pension fund's board is investigating its investment strategy, risk allocation, and mandate for asset management.
Alecta, Sweden's largest pension fund, is facing losses of almost $2 billion due to a failed investment strategy that made it one of the biggest shareholders in two collapsed US banks and another that's been caught up in the crisis. The losses have become clearer after the private pension group sold all of its First Republic Bank stake at a loss of 7.5 billion kronor ($728 million). The soured bets at Alecta have sparked an outcry in the Nordic country, as well as an internal investigation into its investment processes and a summons from the FSA.
