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    Seasoned CIOs to Help Alecta Change

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    Stockholm (NordSIP) – In the aftermath of the recent bank turbulence in the US, Swedish pension giant Alecta has been making headlines worldwide. Alecta’s portfolio suffered considerable losses due to overweight positions in the three niche banks worst affected, Silicon Valley Bank, Signature Bank and First Republic Bank. Given the serious consequences, the pension fund’s Board of Directors has tasked chief executive officer Magnus Billing with investigating precisely what went wrong. His instructions are to focus on examining whether the current investment strategy, risk allocation and mandate for asset management are optimal.

    On 4 April, Alecta issued a statement (in Swedish) announcing the first results of this ongoing investigation. To start with, the pension fund is making several organisational changes. It should come as no surprise that Alecta’s head of equities, Liselott Ledin, has been suspended from her duties. She is being replaced by Ann Grevelius, the former CIO of SEB, who will relinquish her current position on Alecta’s Board to take on the key operative role.

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    Meanwhile, another veteran CIO, Kerim Kaskal, will step in as interim head of the investment organisation. He will hold the reins temporarily as Alecta’s CIO, Henrik Gade Jepsen, continues to be on long-term sick leave. Most recently, Kaskal has been active as Partner at Worthwhile Capital Partners, a firm dedicated to helping managers raise money in sustainable investment strategies.

    Commenting on the changes, Billing admits that what has happened has seriously damaged the customers’ confidence in Alecta and the company’s equity management. “It is now up to us to prove that we deserve their trust again,” he says (in Swedish). “Alecta’s equity management needs a fresh start and new management. Therefore, after discussions with the Board, I have decided on these measures.”

    Apart from the organisational changes, the announcement reveals that reducing the concentration risk in the equity portfolio, with a focus on non-Swedish holdings, will start immediately. Currently, Alecta holds a relatively concentrated equities portfolio of around 100 stocks only.

    Given there is no mention in the press release of whether the changes would affect the pension fund’s sustainability work, NordSIP reached out to hear more on the topic. According to Jacob Lapidus, Head of External Communication and Press at Alecta, the measures do not involve any immediate or fundamental changes with regard to sustainability.

    “However, an investigation is currently underway where we are reviewing Alecta’s investment strategy, risk allocation and mandate for asset management,” adds Lapidus (in Swedish). “We cannot comment on the conclusions of this investigation today, but of course, a possible change in investment strategy may affect how sustainability work is carried out.”

    It would appear that more changes are underway at the pension fund. Watch this space.

    Image courtesy of evelina carborn, Worthwhile Capital Partners
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