Sweden’s Financial Services Authority (Finansinspektionen, FI) said the new investigation it kicked off this week into Alecta’s investment in cash-strapped residential property firm Heimstaden Bostad is about protecting Swedish pension savers’ money.
The watchdog announced on Tuesday that it was formally launching an investigation into the country’s biggest pension fund, the SEK1.21trn (€102bn) occupational provider Alecta, regarding its investments in Heimstaden Bostad, whose largest shareholder is Swedish listed property firm Heimstaden.
FI said it had been asking Alecta questions about the investments in Heimstaden Bostad for some time, and was now choosing to start an investigation.
Alecta – which is discussing injecting new capital into Heimstaden Bostad as it struggles with the rising cost of debt – has already hired lawyers to conduct its own investigation into whether the investment, made 10 years ago, followed the rules.
The key issue is that Alecta owns 38% of the value of the firm, but only has 30% of the votes, while Heimstaden owns the same amount but has 50.1% of votes.
A spokesman for FI told IPE that the authority’s supervision included examining and assessing whether occupational pension companies followed rules that applied to investments.
“Among other things, it includes checking that the companies comply with regulations on vigilance, governance and risk management,” he said.
“It is fundamental that companies have control over and manage the risks in their investments,” he said, adding that the FI would investigate whether Alecta had followed the regulations in connection with the company’s investments in Heimstaden Bostad.
He declined to say whether the FI probe centred around the issue of unequal voting rights for property firm’s owners, but said: “It is central to consumer protection that companies comply with the existing rules.
“Basically, it is about securing and protecting Swedish pension savers’ money,” he said.
He said the new investigation into Alecta would be conducted separately from the review already in progress on Alecta’s risk management and particularly how Alecta measured the risks in various investments.
FI was working quickly on that probe, whose starting point was the company’s investments in Silicon Valley Bank, First Republic Bank and Signature Bank, he said, but was unable to say when it would be concluded.