Swedish FSA to probe Alecta's $4.5 bln Heimstaden investment (updated)

First Republic Bank

12/09/2023 07:25

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      Swedish FSA to investigate Alecta property investment
    

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      Heimstaden is in need of more cash, Alecta has said
    

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      Will examine compliance with governance, risk management
    

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      Alecta replaced CEO in April over U.S. bank losses
    

  
 (Adds details on Alecta stake in paragraph 4, background on
Heimstaden in paragraph 5)
    By Louise  Rasmussen
       COPENHAGEN, Sept 12 (Reuters) - Sweden's financial
industry regulator said on Tuesday it will investigate whether
pension fund provider Alecta complied with rules and regulations
when it invested 50 billion Swedish crowns  ($4.5 billion) in
property company Heimstaden Bostad.
    The Financial Supervisory Authority (FSA) has for some time
questioned Alecta over its Heimstaden Bostad investment, and has
now decided to launch an investigation, the FSA said in a
statement.
    Alecta, one of the largest shareholders in Heimstaden Bostad
with a 38% stake, said last week that the landlord was in need
of more cash, and that it may contribute additional capital.
    The FSA probe will include checking that Alecta's actions
complied with provisions on due diligence, governance and risk
management, the regulator said. 
    Sweden's biggest pension fund provider said in a statement
it would fully comply with the investigation and that its
investment in Heimstaden Bostad amounted to around 50 billion
Swedish crowns, about 4% of its assets.
    "At present, Heimstaden Bostad, just like other real estate
companies, is affected by the interest rate situation and
inflation," Alecta said.
    Heimstaden's difficulties are the latest blow in a worsening
property crisis for Sweden where developers are grappling with
large debts, rising interest rates and a wilting economy.
    Sweden's FSA already has an ongoing investigation into
Alecta's risk management, based on the pension fund provider's
investments in Silicon Valley Bank, First Republic Bank and
Signature Bank.
    Alecta in April replaced its CEO after announcing losses of
19.6 billion crowns on the U.S. bank investments.
    In a separate announcement, Alecta on Tuesday said it had
hired Magnus Tell as head of equity investments, recruiting him
from Swedish state pension fund AP3.
        ($1 = 11.0889 Swedish crowns)

 (Reporting by Louise Breusch Rasmussen; editing by Terje
Solsvik and Jason Neely)
 ((Louisebreusch.rasmussen@tr.com; +45 21 27 97 79;))