Sweden’s biggest pension fund apologises after US$2 billion loss

SWEDEN’S biggest pension fund pledged to learn from its almost US$2 billion loss stemming from the US banking crisis as executives faced pension savers for the first time since the news of its failed investments broke last month.

Alecta’s acting chief executive officer Katarina Thorslund apologised to customers as she spoke at an annual meeting of the fund’s supervisory board in Stockholm on Thursday (Apr 20).

“To be clear, the investments in US banks were a failure and we shouldn’t have ended up in that place,” said Thorslund, who was given the job last week as Alecta let its chief executive, Magnus billing, go.

“We can do better and I fully understand that clients and the supervisory board are disappointed, angry and worried,” Thorslund said. “We take this failure most seriously.”

Alecta, which manages 1.2 trillion kronor (S$155 billion) of pension money, has been in the spotlight since mid-March after disclosing failed investments in US niche banks – Silicon Valley Bank parent SVB Financial Group, First Republic Bank and Signature Bank.

Alecta “remains strong,” said Thorslund, underscoring that the impact from the loss on retirement savings is small and “nobody should be worried over pensions or pension fees.”

Alecta’s general counsel William McKechnie said that an internal investigation has concluded that the decision to invest in the US banks was “within the limits and delegated mandates provided by the board.”

Acting head of asset management, Kerim Kaskal, said no early signs had been detected of “what was later to happen” to the banks and that going forward the fund is “going to evaluate how we best use our risk.” Alecta will also hire an external partner to evaluate its benchmarking model, he said.

“It’s important to us to show that similar mistakes won’t happen again and that you can be confident that we do all that we can to ensure that,” said Thorslund. BLOOMBERG