In a turnaround from last year's significant losses, Alecta, Sweden's primary pension fund, reported a 3.5% return on its defined contribution pension plan for the first three quarters of 2023. This marks a substantial recovery from the 13.1% loss seen during the same period in the previous year.
The fund, which manages assets worth SEK 1.2 trillion ($110 billion), experienced a slight decrease in solvency ratio to 212% from 214%. This comes following public backlash after Alecta faced $2 billion losses tied to the collapse of Silicon Valley Bank and three defunct US banks, events that led to the departure of its CEO and head of equities.
The new CEO, Peder Hasslev, has expressed criticism over the fund's largest investment - a SEK 49 billion stake in Heimstaden Bostad AB. The heavily indebted company is currently under investigation by Sweden’s financial watchdog and is rated two steps above junk by Standard & Poor’s. This controversy resulted in the resignation of Chairman Ingrid Bonde and sparked questions regarding Alecta's reasonable influence over its investments.
In contrast to past reports, Alecta did not disclose the performance of its equities and alternative portfolios this time around. The fund oversees the retirement savings of a quarter of Sweden's population. Further updates on Alecta's financial health are expected with the release of Heimstaden Bostad’s earnings report on Oct. 24, 2023.
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