(The Telegraph) - The chief executive of Sweden’s biggest pension company has been fired after it lost £1.5bn in the recent US banking crisis.
Magnus Billing is leaving Alecta with immediate effect, the company said.
His abrupt exit comes after the pension provider last month revealed it had lost 19.6bn Swedish crowns (£1.5bn) on investments in Silicon Valley Bank (SVB), First Republic Bank and Signature Bank, three lenders at the heart of last month’s US banking crisis.
The dramatic collapse of SVB and Signature Bank in March sparked panic across financial markets, with fears contagion could spread around the globe. First Republic was forced to turn to support from some of Wall Street’s biggest lenders after its share price collapsed during the crisis.
Just days before SVB went under, Alecta told local media it had sold off its holdings in two of Sweden’s largest banks in order to increase its investments in niche US banks.
Mr Billing, who has run Alecta since 2016, later admitted the foray into the US was a “big failure” but tried to downplay the losses, saying they were equivalent to just 2pc of the fund’s capital.
However, the losses provoked outcry. The Swedish National Pensioners’ Organisation said the money was “people’s wages” and insisted the poor performance should be taken seriously.
Alecta, which was founded in 1917, manages the pensions of 2.6m people in Sweden and 35,000 companies. It is the fifth biggest occupational pension provider in Europe, with assets of 1.12 trillion Swedish crowns (£85.6bn).
The pension giant said its board had decided to let Mr Billing go after discussions about how to repair its reputation, admitting: “The losses have severely damaged the trust in Alecta’s asset management.”
Chairman Ingrid Blonde said: “We would like to thank CEO Magnus Billing for the solid work he has put in during his time at Alecta for the good of the company and the customers.
“At the same time, Alecta now needs to look ahead and forcefully implement the necessary changes.”
Deputy chief executive Katarina Thorslund has taken over on an interim basis and Alecta has begun the recruitment process to find a new leader.
The company last week put its equities chief, Liselott Ledin, on leave and said it would scale back large investments in businesses outside of its home market in a bid to placate savers.
Ms Blonde branded Ms Ledin’s investment decisions “unusually inept”.
The botched bets have already attracted scrutiny from Sweden’s financial watchdog, while both the Government and central bank have said they are monitoring the situation closely.
By Matt Oliver
