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Swedish pension fund fires top boss over multimillion US bank losses

One of Sweden's largest pension funds, Alecta, is replacing its CEO after the fund lost almost 20 billion kronor from investments in crisis-hit US banks.

Swedish pension fund fires top boss over multimillion US bank losses
Magnus Billing will step down as CEO of Alecta with immediate effect. Photo: Magnus Hjalmarson Neideman/SvD/TT

“The Board has now concluded that Alecta needs new leadership to implement the necessary changes in asset management and restore trust,” the fund said in a statement.

Alecta said CEO Magnus Billing would step down with “immediate effect,” and that deputy CEO Katarina Thorslund would step in as CEO during the search for a permanent replacement.

The fund announced in mid March that it had lost 19.6 billion kronor as a result of its holdings in three crisis-hit US banks: Silicon Valley Bank (SVB), Signature Bank and First Republic.

Days before the collapse of SVB, Alecta told financial newspaper Dagens Industri that it had sold off its assets in two of Sweden’s largest banks in order to up its investments in US niche banks.

In early April, the fund announced it was replacing its head of equities and that it would be reducing the risk of having large stakes in private companies far from Alecta’s home market.

The dramatic collapse of SVB and, shortly after, Signature Bank in March unleashed turmoil across financial markets with fears of an international contagion.

However, Swedish financial authorities have toned down the threat to Sweden’s financial institutions and the country’s Financial Supervisory Authority FI said that neither stability in the system nor future pensions had been affected to any noteworthy degree.

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BUSINESS

India among top investment destinations for Swedish companies

Saudi Arabia, the UAE and India are the top investment destinations for Swedish companies, meaning that businesses are planning on increasing their investments in these markets over the next 12 months.

India among top investment destinations for Swedish companies

“The stars are aligned for India. They have got a lot of internal investment programmes started, have acquired internal stability and managed to navigate the geopolitical situation in such a way that no one has any doubts any longer,” said Business Sweden CEO Jan Larsson.

Swedish businesses are in general less optimistic than last year about the global business scene, due to a struggling European economy and escalating trade wars between the US and China, according to a new Global Business Climate Survey 2024 by Business Sweden.

Despite this, many of the 24 countries in the report maintained a generally positive outlook, with scores over 3 on a 5-point scale, where 1 equals very poor and 5 very good. 

Overall, just six percent of respondents perceived the business climate as very good, 31 percent as good, 45 percent as neutral, 15 percent as poor and 2 percent as very poor.

There are also some markets where sentiment has improved slightly since last year: Brazil, South Africa, South Korea, the UK and Spain. 

At the other end of the scale, interest in investing in giant markets such as China and Germany appears to be on the wane, along with Taiwan and Mexico.

“Doing business in Germany comes with a lot of administrative work compared to Sweden, which is time consuming and costly,” EWAB Engineering GmbH managing director Fredrik Almcrantz said in the report. “Digitalisation doesn’t replace paperwork related to compliance with rules and regulations, it is just an added layer on top of traditional routines.”

Almost a third (65 percent) of Swedish businesses surveyed expect revenue to grow and plan to increase their global investments in the year ahead. A clear majority (70 percent) of companies were profitable last year, while 12 percent reached break-even and 13 percent reported negative results.

The Netherlands and France had the highest percentage of profitable Swedish companies, while the highest share of companies making a loss were reported in South Korea and Germany.

India, the United Arab Emirates, Indonesia and Saudi Arabia are among the countries on the list identified as having the most favourable business climates for Swedish companies, while Germany, Mexico and the Netherlands were rated lowest on the list.

India, Brazil and Indonesia also had the highest share of companies saying that the Swedish brand contributes “to an extent or great extent” to their success in those markets. At the other end of the scale were the United States, Canada and Saudi Arabia.

“In the Indonesian market, Swedish products are generally considered to be high quality, robust and durable,” said M. Syahrul Mohideen, area sales manager at ScanBox Thermoproducts AB.

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