Sweden's Financial Supervisory Authority has launched an investigation into Stockholm-based Alecta's 50 billion Swedish kronor ($4.5 billion) investment in real estate firm Heimstaden Bostad.
The allocation corresponds to about 4% of the Swedish pension fund's total assets of 1.2 trillion kronor, it said in a news release. The real estate firm was established in 2013 by Heimstaden and Alecta, according to its website. The pension fund owns a 38% stake.
The FSA is looking into whether Alecta followed the relevant regulations in connection with its investments in the firm, the regulator said in its own news release. It said its supervision includes investigating and assessing whether corporate pension funds follow rules that apply to investments, including checking compliance with due diligence, governance and risk management. The regulator "has been asking Alecta questions about these investments for some time," a translation of its news release said.
Alecta said in its release that it has "full respect for the Financial Supervisory Authority starting this investigation as part of the authority's mission, and Alecta will naturally cooperate fully."
The pension fund added that the value of its holding in Heimstaden Bostad "will, just like the value in our other investments, change over time. At present, Heimstaden Bostad, just like other real estate companies, is affected by the interest rate situation and inflation."
A spokesman for Alecta declined to comment beyond the release.
The Swedish regulator is already investigating Alecta's risk management due to its investments in U.S. banks Silicon Valley Bank, First Republic Bank and Signature Bank. The FSA launched its probe in May and that investigation "continues as planned." The pension fund had a total 12 billion kronor exposure to SVB and Signature Bank, which were written down to zero. Its 9.7 billion kronor holding in First Republic Bank was sold at a loss in March, for 7.3 billion kronor. Alecta's board worked to restore trust in the plan, with CEO Magnus Billing leaving and Katarina Thorslund, deputy CEO, named acting CEO. Peder Hasslev joined as CEO this month.
Separately, Alecta said Magnus Tell will join as head of equities, effective no later than Nov. 28.
The last head of equities was Bo Selling, who left in 2020. A spokesman said the role had not been filled since then. Alecta has about 450 billion kronor invested in equities.
"I am very happy that we have now recruited Magnus as the new equity manager. His competence and leadership qualities will help strengthen the organization and rebuild trust in Alecta's asset management," Hasslev said in a news release.
Tell is head of equities at AP3, Stockholm, which had 491.5 billion kronor in assets as of June 30. A spokesperson said a recruitment process starts this week.
"We are proud that AP3's very skilled key employees and leaders are attractive for important positions at important firms," the spokesperson said in an email.
Alecta last month tapped AP3's CIO Pablo Bernengo as its next CIO. Alecta said in its release regarding Tell's appointment that his recruitment was led by the human resources manager and coordinated with Hasslev. Bernengo was not involved in the process.
