Sweden’s biggest pension fund Alecta today revealed it is looking to sell a chunk of its troublesome investment in Heimstaden Bostad, while declaring the overhaul designed to restore confidence after the investment losses scandal of 2023 is now complete.
Peder Hasslev, Alecta’s chief executive officer, said: “Alecta has delivered good customer service, secure pensions and continued premium reductions to companies, despite a turbulent environment.”
Hasslev was brought in nearly two years ago to stabilise the occupational pensions institution after a crisis over big losses on controversial investments in US niche banks as well as on its hefty stake in Swedish residential property firm Heimstaden Bostad.
In an interim report published today, he said: “Since the beginning of 2024, we have been working to implement a comprehensive improvement programme to make Alecta safer and stronger after the events of 2023.
“In principle, all measures in the improvement programme have now been implemented and we are working in line with new routines and processes,” he said.
A few measures were “of a more comprehensive nature”, he added, and those had been transferred to the ongoing operations.
Hasslev said the aim of the improvement programme had been to create risk management of the highest quality and thereby a safer Alecta for its customers.
“Our assessment is that the measures in the programme have addressed the shortcomings that management and the board have identified,” he said.
“If the outcome of the Swedish Financial Supervisory Authority’s investigations into the investments in the American banks and Heimstaden Bostad show that further measures need to be taken, Alecta will of course do so,” Hasslev said.
Heimstaden stake
Alecta said its investment in Heimstaden Bostad – the institution’s single largest holding – had a value of SEK41.5bn (€3.72bn) at the end of June, having risen 1.9% in the period. This is still below the SEK49bn value it was stated at in September 2023.
The Stockholm-based insitution said the arbitration proceedings it initiated in December 2024 against Heimstaden Investment were still ongoing, as was Alecta’s own work to address the shortcomings it had previously identified regarding the cooperation with Heimstaden.
“As part of this work, Alecta currently has the ambition to reduce its holding in Heimstaden Bostad by at least SEK6bn when possible,” the firm said.
“This is partly because, as previously communicated, we believe that the shareholders’ agreement regarding the investment is unbalanced and that the cooperation with the company’s managers is not working satisfactorily,” it said, adding that reducing the holding in Heimstaden Bostad was “only one of several potential measures to address the situation”.
In investment results, Alecta reported a 2.6% return for its defined contribution Alecta Optimal Pension product for January to June and 2.4% for its defined benefit pensions business.
The institution’s total assets increased to SEK1.35trn by the end of June from SEK1.31trn at the turn of the year, while solvency for the group weakened to 197% from 201%, according to the interim report.
No comments yet