Swedish pension company Alecta has revealed that its Optimal Pension DC product suffered a -2 per cent return in the first quarter of 2025, down from 5.9 per cent for the same period last year.

Publishing its quarterly results, Alecta said the figure is based on a preselection portfolio invested in 60 per cent equities. Assets under management in the total portfolio for Alecta Optimal Pension totalled SEK 299bn, up from SEK 284bn at the end of the period.

Over the longer term, its quarterly results paint a better picture, with an 8.7 per cent recent on an annual basis, over the past five years; although this is down from 8.9 per cent reported at the same time last year.

Furthermore, the collective funding ratio for its DB insurance was 161 per cent, down from 163 per cent in Q1 2024.

Collective funding is a buffer for Alecta's insurance obligations against variations in investment returns and insurance risks. The consolidation level is Alecta's assets as a percentage of insurance commitments and governs the distribution of bonuses to customers.

Assets under management in the total DB portfolio totalled SEK 1,002bn, down from SEK 1,007bn at the end of the period.

In addition, the solvency ratio for the group was 197 per cent, down from 201 per cent, while the management expense ratio for the group was 0.07 per cent (0.07) and the asset management expense ratio was 0.026 per cent (0.028).

Total capital managed by Alecta was SEK 1,301bn, up from SEK 1,291bn at the end of the period.

Alecta, which has confirmed its intention to appoint Magnus Hall as chair, has been under increased scrutiny over the past couple of years.

Sweden's Financial Supervisory Authority (FI) launched an investigation into Alecta's risk management after the group revealed losses of SEK 20bn following turbulence in the US banking market in 2023.

The supervisory authority later extended its investigation into Alecta to determine whether it followed the correct regulations regarding its investments in Heimstaden Bostad.

This investigation found that the pension provider had "violated several regulations" in relation to its investments.

However, the group said that, since autumn 2023, it has worked "hard" to ensure better risk management, governance and competence, particularly in asset management.

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