Swedish pension group Alecta faces losing as much as 12 billion Swedish kronor ($1.13 billion) following the collapse of Silicon Valley Bank, it said Monday.
Alecta, which holds around SEK1.12 trillion in assets under management, was the fourth-largest shareholder in SVB Financial Group at the end of 2022 with a 4.45% stake. It began investing in SVB in June 2019 and had added to its holding as recently as last November, bringing its total investment in the bank to SEK8.9 billion.
Silicon Valley Bank collapsed Friday after a run on deposits doomed the tech-focused lender’s plans to raise fresh capital. The specialty tech lender was closed by the California Department of Financial Protection and Innovation Friday and put under the control of the Federal Deposit Insurance Corp.
Depositors at the bank have been backstopped by the U.S. government so are expected to have access to their funds Monday, but shareholders have been effectively wiped out.
In the wake of the bank’s collapse, New York-based Signature Bank suffered a similar fate over the weekend as investors became concerned about its high share of uninsured deposits, prompting New York state regulators to take control of Signature, also effectively wiping out shareholders.
Stockholm-based Alecta is a major shareholder in Signature too, having started investing in the bank in January 2016 and making its last investment in July 2022 to bring its total investment to SEK3.2 billion.
“The FDIC has taken control of Silicon Valley Bank and Signature Bank, and depositors’ assets are guaranteed,” the company said in a statement. “The measure means that Alecta now values the shares in both banks at zero.”
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