Alecta Reports 5.9% Q1 Return After Losing Billions on Regional Banks

The Swedish pension fund Alecta announced on Tuesday that its Optimal Pension defined contribution plan returned 5.9% in the first quarter of 2024. The plan returned an annualized 8.9% for the five years, ending March 31, 2024.

The fund was still reeling with losses from bets on regional U.S. banks and a beleaguered investment in real estate company Heimstaden Bostad. The losses led to many resignations, including Alecta chair Ingrid Bonde and other senior investment professionals. In March, Alecta chair Carina Akerstrom resigned after a month.

Most of Alecta’s losses came from last year’s collapse of Silicon Valley Bank, Signature Bank and First Republic Bank, the fund lost more than $2 billion on those investments. Alecta also lost more than $1 billion from its stake in European residential real estate company Heimstaden Bostad.

Alecta’s optimal plan has SEK 284 billion in assets ($26.10 billion), while the total capital managed by Alecta is SEK 1.291 trillion ($118.68 billion) across its optimal plan and other defined benefit insurance plans. Roughly 25% of Sweden’s population are beneficiaries of Alecta, with the fund managing the pensions of 2.6 million people in the country with a population of approximately 10.6 million.