Sweden’s financial watchdog has closed its long-running investigation into Alecta’s loss-making investments into three US niche banks, which tipped the pension fund into crisis in 2023, saying it found no breach of the rules.
The Swedish Financial Supervisory Authority (Finansinspektionen, FI) announced this morning: “The investigation has not shown any violations of the rules in the risk management system Alecta has had for assessing investment risks.
“In light of this, the case is therefore being closed,” it said, but noted the probe was only one of two it had been conducting into Alecta’s investment operations since 2023 – and the other is still going on.
In the investigation now concluded, FI said that – among other things – it had examined Alecta’s risk management in light of the occupational pension provider’s losses on the three listed US banks Silicon Valley Bank, First Republic Bank and Signature Bank.
The probe had focused on whether Alecta fulfilled requirements for measuring and valuing risks in listed shares, it said.
“It is clear that Alecta has made large losses as a result of these investments, but we cannot conclude that Alecta has violated the regulations,” said Leonard Weber Landgren, head of the insurance business division at the authority.
Alecta lost around €1.7bn on its investments in the three US banks.
FI said that the investigation into Alecta in connection with its investments in residential property firm Heimstaden Bostad was still ongoing and not affected by the decision announced today.
Responding to news, Alecta’s chief executive officer Peder Hasslev said: ”We have taken note of the decision of the Swedish Financial Supervisory Authority to drop the investigation into Alecta’s investments in three American banks.”
He said that independently of FI’s investigation, the SEK1.4trn (€12bn) pension fund – Sweden’s largest – had initiated work in 2023 to assess whether it needed to improve its organisation, given what happened with the US banks “and the situation with Heimstaden Bostad”.
“The work made it clear that we needed to improve and strengthen our asset management, which resulted in an ambitious and comprehensive improvement program with a focus on governance, risk management and competence,” Hasslev said.
“The improvement programme has been implemented today, which has made Alecta stronger and safer for our customers,” Hasslev said.
A fortnight ago, an arbitration tribunal ruled against Alecta in its claim that its co-investor in Heimstaden Bostad had breached the terms of their agreement over joint ownership.
FI has already reprimanded one of the Swedish pension investors it has been investigating over their investments in Heimstaden Bostad, having ruled back in March that the Swedish Pensions Agency (Pensionsmyndigheten) failed in its risk control duties.
Apart from Alecta, FI is also investigating whether Folksam Liv, Folksam Sak and KPA Pension followed the rules in connection with their investments in Heimstaden Bostad.
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