Stockholm (NordSIP) – What a difference a few days make! “Alecta’s equity management needs a fresh start and new management,” CEO Magnus Billing commented last week concurrently with the announcement of a first shake down and the appointment of a new CIO and a new Head of Equities. According to the latest press release issued by the pension giant on 11 April, it appears it was not only the equity management that needed a fresh start. During the Easter holidays, the Board continued their discussions and concluded that new leadership is required to implement the necessary changes in asset management and restore confidence. Accordingly, Billing will be leaving his position as a CEO with immediate effect.
Deputy CEO, Katarina Thorslund, has been appointed acting CEO, and the recruitment process to find a permanent replacement will start immediately. Meanwhile, the Board’s Chair, Ingrid Bonde, will support the organisation by assuming a more executive role.
“We want to thank CEO Magnus Billing for the solid work he has done during his time at Alecta for the benefit of the company and its customers,” comments Bonde (in Swedish). “At the same time, Alecta now needs to look forward and forcefully implement the necessary changes,” she adds.
Billing was appointed Alecta’s CEO in 2016 after a long and successful career at Nasdaq. During his fifteen years at the stock exchange, he was an outspoken advocate of active management and ownership. Upon joining Alecta, he was bound to bring this attitude along, effectively changing a pension manager that had previously often been criticised for being a conflict-averse owner who rarely takes action.
Governance issues apart, it was clear from the very start of his tenure that Billing had put sustainability at the top of his agenda. Under his management, Alecta has been viewed as a model of financial sustainability. In 2019, for instance, it became the first organisation in the world to be awarded an ESG4Real certification.
“When it comes to sustainability, we have high ambitions, and our active management is an essential part of that work,” wrote Billing not long ago. “We believe that it is more responsible to choose each individual investment after careful analysis rather than just invest in a ‘mixed bag’ the way index management tends to do. While index managers may have thousands of different shares in their portfolios, we have just over 100. Every share has been handpicked by our managers after careful screening and analysis.”
Billing’s sustainability credentials are indisputable. He was one of the participants in the High-Level Expert Group (HLEG) on Sustainable Finance, mandated by the European Commission to propose concrete sustainability solutions ahead of adopting an action plan and legislative proposals.
The question remains, therefore, as to how the changes that Alecta is currently undergoing will affect its sustainability leadership position. According to Jacob Lapidus, Head of External Communication and Press at Alecta, the steps taken at this point 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,” he points out. “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.”
