(Bloomberg) -- Alecta, Sweden’s biggest private pension fund, is set to navigate a turbulent few weeks as authorities aim to conclude their probes into the $3.2 billion it lost as a result of investment missteps.
On Friday, Bloomberg News reported that prosecutors in Sweden had dropped two counts of possible bribery under an investigation centered on the fund’s 39% stake in landlord Heimstaden Bostad AB. That doesn’t draw a line under the probe, however, with more than 10 counts of suspected crimes remaining in the Alecta investigation, according to the country’s National Anti-Corruption Unit.
That’s just one of three probes as Swedish authorities seek to untangle a string of disasters for the fund, which manages about $115 billion for a quarter of the country’s population. The Nordic country’s financial watchdog is also looking both into the property bet as well as $2 billion in losses in US niche banks.
The two counts dropped on Friday concerned a trip “that never materialized” in 2023, prosecutor Johan Lindmark said by phone. “We have investigated and held interviews and concluded that this was not a bribe trip but a legitimate business trip.” The lawyer declined to estimate when the other counts would be resolved.
Heimstaden Bostad declined to comment on the matter when contacted by Bloomberg on Monday.
Key to the investigation is whether or not individuals connected to the Heimstaden Bostad holding had given or received bribes. The stake — Alecta’s biggest single real estate bet worth 39.2 billion Swedish kronor ($3.8 billion) — only gives the fund 30% of the landlord’s voting rights while Norwegian billionaire Ivar Tollefsen controls 50.1% of the votes for a smaller capital share.
It’s a state of affairs that has angered Alecta Chief Executive Officer Peder Hasslev, who took the job after the scandals broke. “We still believe that the shareholder agreement regarding Heimstaden Bostad is unbalanced to our detriment,” he said earlier this month. “We’re really focused on improving this.”
In April, Swedish business daily Dagens Industri published an article alleging that employees of Alecta were being investigated for trips to France and South Africa under the invitation of Tollefsen, who chairs the company that controls Heimstaden Bostad. The property group said at the time that there was “no substance to the speculation.”
Nor do the challenges that Alecta faces end there. The pension fund must respond by Friday to a separate sanctions review by Sweden’s Financial Supervisory Authority that is also investigating its stake in Heimstaden Bostad.
“The FSA’s investigation process is conducted independently in relation to other authorities,” a spokeswoman for the FSA said in emailed comments.
The financial watchdog is further probing Alecta over pension savers’ money it lost as a result of betting on three defunct lenders in the US, including Silicon Valley Bank.
Those losses and the heavy writedown of a property stake that it spent $4.8 billion on led to a clearout of C-suite executives over the past 18 months, including the chairperson, chief executive, head of equities and general counsel.
Alecta has since pledged to revamp its governance processes and has appointed four new board members with greater financial and legal expertise, as well being independent to the company and the organizations representing its owners.
The fund, which manages assets via occupational pension schemes, remains one of the biggest investors on Stockholm’s stock exchange, as well as one of the country’s largest property owners.
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