Sweden's largest pension fund fires chief executive over 'unusually inept' bank investments

Magnus Billing, who has run Alecta since 2016, admitted that the US foray was a «big flop». Photo: Evelina Karborn

The CEO of Sweden's largest pension company has been sacked after it lost £1.5bn in the recent US banking crisis.

Magnus Billing is leaving Alecta immediately, the company said .

< p>His abrupt exit comes after the pension provider revealed last month that he lost SEK 19.6bn (£1.5bn) on investments in Silicon Valley Bank (SVB), First Republic Bank and Signature Bank. three creditors caught in the middle last month. Banking crisis in the USA.

The sharp collapse of SVB and Signature Bank in March triggered a panic in the financial markets and fears that contagion could spread around the world. First Republic was forced to seek support from some of Wall Street's biggest lenders after its share price collapsed during the crisis.

Just days before SVB's bankruptcy, Alecta told local media that it had sold its assets in two days. of Sweden's largest banks to boost their investments in US niche banks.

Mr Billing, who has run Alecta since 2016, later admitted that the US foray was a «big flop» but tried to downplay losses stating that they are equivalent to just 2% of the fund's capital.

However, the loss caused outrage. The Swedish National Pensioners' Organization said the money was «people's wages» and insisted that poor performance should be taken seriously.

Alecta, founded in 1917, manages the pensions of 2.6 million people in Sweden and 35,000 people. companies. It is the fifth largest pension system in Europe with SEK 1.12 trillion (£85.6 billion) in assets.

The pension giant said its board decided to let Mr. Billing go after discussing how to restore his reputation, acknowledging: «The losses have seriously undermined the credibility of Alecta's asset management.»

Chairman Ingrid Blond said: » We would like to thank CEO Magnus Billing for the solid work he has done during his time at Alecta for the benefit of the company and customers.

“At the same time, Alecta must now look ahead and decisively implement the necessary changes.”

Deputy CEO Katarina Thorslund has taken over temporarily and Alecta has begun a hiring process to find a new leader.

Company Equity chief Lieselotte Ledeen was put on leave last week and said, which will reduce large investments in businesses outside its home market to appease savers.

Ms Blond called Ms Ledeen's investment decisions «unusually inept».

Bad bids have already attracted the attention of the Swedish Financial Supervisory Authority, while the government and the central bank said they were monitoring the situation closely.