Alecta, Stockholm, could soon include passive equity to the asset allocation of its defined benefit section following an asset management review, a spokesman confirmed Friday.
The size of the new allocation has not yet been decided, he said. But the investor does not have any passive equity allocation in the 950 billion Swedish kronor ($90.2 billion) DB portfolio and invests about 35% of assets in active equity.
The review of Alecta's investment management model, which started in December, concluded that the defined benefit portfolio required greater stability, it said in a news release Friday.
Alecta intends to adapt the risk profile to a lower volatility for future payouts, through increased diversification as well as increasing the number of companies in the portfolio. At the same time due to losses from the collapse of Silicon Valley Bank in March, it will lower the number of portfolio companies based outside of the Nordics.
Alecta had a total 12 billion kronor exposure to Silicon Valley Bank and Signature Bank, which was written down to zero following the collapse of the banks. The pension fund also sold a 9.7 billion kronor holding in First Republic Bank at a loss, divesting its exposure in March for 7.3 billion kronor.
On Friday, Alecta also said that its 250 billion kronor defined contribution section's equity investments will continue to be actively managed, but it will also expand its investment universe as well as reduce ownership of portfolio companies from outside of the Nordic region.
"Confidence in Alecta has been negatively affected by the losses in the American banks in March. With these proposals for changes, we learn from the spring's events, adapt the model to higher volumes and lay the foundation for continued high returns and adapted risk for our different categories of customers," Ingrid Bonde, chairwoman of the board of Alecta, said in the release.
