The head of Sweden’s largest pension fund is dismissed after huge losses

Magnus Billing has been removed from his position as head of Sweden’s largest pension fund, Alecta, after the fund became one of the largest international casualties in the wake of the banking crisis in the United States, according to Bloomberg.

Towards the end of March, it became known that the fund was facing a loss of more than $2 billion, just over 21 billion crowns, after the collapse of the banking sector in March.

Abnormally incompetent

No other pension fund has invested as much in the three US specialty banks as Alecta. In total, the bank lost about NOK 8.9 billion in Silicon Valley Bank (SVB) and NOK 3.2 billion in Signature Bank. While at First Republic Bank, the Swedes suffered a loss of about NOK 7.5 billion.

The fund’s head of portfolio management, Liselotte Leiden, was laid off last week and the board announced they would trim significant holdings in the “far from home” company. Previously, the fund held senior positions in US companies such as Microsoft, Alphabet, TJX Cos.

Fund chairwoman Ingrid Bond went so far as to call Ledeen’s investment decisions “unnaturally inappropriate”, something for which she was sharply criticized by trade unions thereafter.

Manages 1.2 trillion

Alecta manages the savings of 2.6 million Swedes, and has NOK 1.2 trillion under management. Recently, the fund was sold from the Swedish banks Handelsbanken and Swedbank in order to invest more in specialized US banks.

The fund made its first investment in Signature Bank in 2016, before adding SVB and First Republic to the portfolio in 2019. At the turn of the year, Alecta ranked as the fifth largest holder in SVB and First Republic, and the6. Signature Bank’s largest owner, Bloomberg writes.

The fund says it does not expect to recover anything from its investment.

Executive Vice President Katarina Thorslund has been named interim CEO and is beginning the search for a replacement for Alecta immediately, the company says.