(Bloomberg) -- Alecta has lost its chairman just weeks after retracting the nomination for another, pushing Sweden’s largest pension fund deeper into a crisis.

Carina Akerstrom — one of the country’s best known financial executives — resigned from the post on Sunday, a little over a week after getting appointed on February 22. The former chief executive officer of Svenska Handelsbanken AB was tapped for the position after Alecta’s supervisory board, led by Kenneth Bengtsson, retracted the nomination of former Danish Central Bank Governor Lars Rohde in late January. 

The sudden departure of Akerstrom compounds a leadership crisis at the pension fund, which manages 1.2 trillion kronor ($116 billion) of retirement savings for a quarter of Sweden’s population. Alecta has replaced a string of top executives and directors including the CEO and the previous chairman since it lost $2 billion on an investment in several US regional banks. 

The turmoil deepened later in the year when Alecta’s investment in commercial landlord Heimstaden Bostad AB plunged in value too, pushing the pension fund’s total writedowns on those investments to 32.7 billion Swedish kronor. Executives that have left over the span of the year also include the head of equities, the chief investment officer, the general counsel and the head of real assets.

 

The chairman’s resignation follows a report by newspaper Dagens Industri highlighting a potential conflict of interest with Heimstaden Bostad. Akerstrom’s previous employer, Handelsbanken, is Heimstaden Bostad’s creditor, the report said, possibly putting one of her key responsibilities at Alecta — to scrutinize its $4.8 billion investment in the landlord — at odds with her contractual demands with the Swedish bank.

Akerstrom stepped down as Handelsbanken’s CEO at the start of the year, but her contract runs until October 2024 and requires “full loyalty” with the company until then, Dagens Industri said in the report. She has signed life-long non-disclosure agreements for all Handelsbanken-related business, the newspaper said.

“It is regrettable that Carina Akerstrom has made a changed assessment of her opportunities to complete the assignment as chairman of the board in Alecta and has chosen to resign,” Bengtsson said in the release on Sunday. “No new information has come to light that we didn’t already know. During the process, we have of course asked extensive questions to Carina Akerstrom about this. Our view is that there was no conflict of interest that could not be handled in the usual way.”

Akerstrom couldn’t immediately be reached for comment.

Vice Chairman Jan-Olof Jacke will replace Akerstrom, Alecta said in the statement. Jacke had steered the fund since October in an interim capacity after Ingrid Bonde stepped down as chairman.

There’s no need to convene a shareholder meeting to sign off on his appointment, an Alecta spokesperson said. 

Alecta took a 19% writedown in the value of its Heimstaden Bostad stake in the fourth quarter, shaving 8.7 billion kronor off the holding.

Heimstaden Bostad is currently striving to offload properties amid credit-rating downgrades and a steep jump in borrowing costs. As chairman, Akerstrom would also have led the renegotiations surrounding the disadvantageous shareholder agreement with the company’s co-owner, Norwegian billionaire Ivar Tollefsen. 

Read More: Sweden’s Property Crisis Threatens Its Biggest Pension Fund

Europe’s property sector is in turmoil after years of zero rates ended with central banks jacking up rates at a fast pace, causing real estate valuations to fall and squeezing landlords who need to refinance large debt piles. In Sweden, the financial regulator has warned the full effect of rate increases is yet to be seen.

The Heimstaden Bostad debacle is the second high-profile crisis for the retirement fund, after it lost $2 billion on risky investments in US niche banks, including Silicon Valley Bank a year ago. The fiasco led to the departures of a number of top executives and even prompted an investigation by the country’s financial authorities.

Alecta’s stake in Heimstaden Bostad is also under investigation by Sweden’s financial watchdog, as well as the prosecutor. The losses, while attention-grabbing, do not threaten Alecta’s stability or solvency, the fund has said previously.

Read More: Alecta Chair Says Fund Exiting “Crisis of Confidence” 

 

(Updates with context throughout)

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