The Swedish pension group caught up in the fallout of Silicon Valley Bank this spring saw the return on its investments bounce back from last year’s losses.
(Bloomberg) — The Swedish pension group caught up in the fallout of Silicon Valley Bank this spring saw the return on its investments bounce back from last year’s losses.
Alecta reported returns on its defined-contribution pension plan of 3.5% for the first nine months of 2023, better than the 13.1% loss for the same period a year earlier, according to a statement on Thursday.
Alecta, the country’s biggest pension fund with 1.2 trillion Swedish kronor ($110 billion) of assets under management, also said the solvency ratio stood at 212% compared to 214% a year ago.
The Stockholm-based pension group has been in the spotlight after it incurred $2 billion in losses from three failed bets tied to the collapse of Silicon Valley Bank in the US. The debacle, which led to the ousting of the chief executive officer and equities boss, prompted an outcry in Sweden — where the fund oversees the retirement savings of a quarter of the population.
Alecta however gave no breakdown of its equities and alternative portfolios performance, despite having done so in previous quarterly reports.
The pressure has continued to mount in recent weeks over the fund’s single biggest investment, a 49 billion kronor bet on heavily-indebted landlord Heimstaden Bostad AB. That holding, along with its stakes in three defunct banks in the US, is currently the subject of two separate investigations by Sweden’s financial watchdog.
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The fund’s new chief executive, Peder Hasslev, told local media that the investment in which Alecta is a 38% shareholder should never have been made.
“Alecta has received a return on the investment in Heimstaden Bostad, but not enough payment for the risk we took, and there are also question marks regarding whether we have reasonable influence,” according to a statement earlier this month.
The public scrutiny of yet another potential misstep also prompted the recent departure of Alecta’s Chairman Ingrid Bonde, who said there had been too much focus on her as a person.
Landlord Heimstaden Bostad — rated two steps above junk with a negative outlook at Standard & Poor’s — reports earnings on Oct. 24.
–With assistance from Christopher Jungstedt.
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