(Bloomberg) -- Alecta’s Chief Executive Officer Magnus Billing was forced to step down after Sweden’s biggest pension fund became one of the largest overseas casualties of the meltdown at Silicon Valley Bank.

The fund decided to let Billing go with immediate effect as it grapples with the fallout from almost $2 billion of losses, according to a statement on Tuesday. The board took the decision after a discussion about the right path and “how to restore trust” in the fund, it said.

Deputy CEO Katarina Thorslund has been appointed as acting CEO, and the recruitment process to find a new leader for Alecta begins immediately.

The ousting of Billing, who has been at the firm since 2016, is the most dramatic personnel fallout yet from the scandal, which saw the fund take losses on investments in Silicon Valley Bank parent SVB Financial Group, Signature Bank and First Republic Bank. No other pension fund had bet on the three niche US banks to the extent that Alecta had. 

The fund last week put head of equity portfolio management, Liselott Ledin, on leave and said it would scale back large stakes in companies “far away from home.” Chairman Ingrid Bonde then called Ledin’s investment decisions “unusually inept,” only to face sharp criticism from lawyers representing Unionen, one of Sweden’s largest trade unions, who called it “like an act in some kind of panic to show that you’re doing something and this person gets stuck in the middle.”

Alecta, which oversees the savings of 2.6 million Swedes, has 1.2 trillion kronor ($115 billion) under management. It had recently exited stakes in two local lenders, Svenska Handelsbanken AB and Swedbank AB, and chose to invest in the niche US banks.

It initially opened a position in Signature Bank in 2016, adding SVB and First Republic in 2019, allocating more resources over the years. At the end of last year, it was the fifth-biggest owner of SVB and First Republic, and sixth-biggest holder of Signature, according to data compiled by Bloomberg. None of the banks made it to the top ten of its own portfolio, however.

The fund has said it does not expect to recover any of its investments in SVB and Signature, and that it has sold its First Republic holding at a loss.

The fallout from the failed bets had already led to a summons from the country’s financial watchdog while both the government and central bank have said they are monitoring the situation closely. Last week, Dagens Industri reported that the FSA had extended a review of Alecta’s investments to also include other trades than the three US banks.

Blacked Out

Documents obtained from the regulator that are partially blacked out indicate it’s asked Alecta to provide further information on at least one other investment than the three banks.

Alecta has also said it plans to scale back large stakes in companies far from its home market — the biggest such positions include Microsoft Corp., Google parent Alphabet Inc. and TJX Cos Inc., a budget apparel and home decor retailer.

Billing, who had admitted the foray into the US was “a big failure,” has repeatedly sought to downplay its significance, saying the losses were equal to less than 2% of the fund’s capital. Still, the Swedish National Pensioners’ Organization pointed out the money is “people’s wages,” indicating any losses should be taken seriously.

Prior to joining Alecta as CEO, Billing oversaw Nasdaq Inc.’s Nordic operations, including the exchanges in Sweden, Denmark, Finland, Iceland and the Baltic countries. He had also managed the Stockholm bourse after legal roles at Nasdaq. He has a degree in law from the Stockholm University.

Acting CEO Thorslund, who is also head of customer relations, joined Alecta two decades ago, working her way up the ranks from actuarial and financial management roles. She was previously employed by Folksam and SPP, two of Alecta’s rivals.

Bonde will support the organization as working chairman of the board, the fund said. 

Ann Grevelius, a member of Alecta’s board of directors, is taking over the position of temporary head of equities, to replace Ledin. She is set to oversee a strategic review of how to manage the equities portfolio in the future, with a target to conclude the main parts of the work “in good time before the summer.”

--With assistance from Thomas Hall, Niclas Rolander and Anton Wilen.

(Adds context on the size of Alecta’s bank bets in seventh paragraph.)

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