The Swedish pension fund embroiled in the Silicon Valley Bank crisis this spring is again facing reprimands from the Nordic country’s financial watchdog over its 38% stake in struggling landlord Heimstaden Bostad AB.
(Bloomberg) — The Swedish pension fund embroiled in the Silicon Valley Bank crisis this spring is again facing reprimands from the Nordic country’s financial watchdog over its 38% stake in struggling landlord Heimstaden Bostad AB.
Alecta, Sweden’s largest private pension group, failed to properly report its calculations of market risks — such as currency or interest rates — in connection with the property stake, newspaper Svenska Dagbladet reported, citing an email exchange between the company and the Financial Supervisory Authority.
There were also questions raised over the capital Alecta allocated to that holding, valued at about 47 billion kronor ($4.2 billion) following a writedown in April.
“Externally available information about Heimstaden Bostad AB indicates that the company has a non-insignificant leverage ratio, which justifies the FSA’s question regarding the impact the company’s leverage had on Alecta’s calculation of the capital requirement for property-price risk,” the watchdog said in one of the exchanges, according to the newspaper.
The deepening concern over Alecta’s massive bet on a landlord that is still scrambling to plug a capital shortfall prompted the FSA to launch a formal investigation into the investment earlier this month. That came after a turbulent few months for the pension group after it lost $2 billion in three failed investments connected to the US banking crisis at the start of the year. The watchdog has also been probing Alecta since May over its US missteps.
Both Alecta and the FSA declined to comment on the email exchange when contacted by the newspaper.
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