Less than a year after replacing top management over corruption and governance scandals, Swedish pension fund giant Alecta is jumping into a new EMS partnership with FlexTrade.
FlexTRADER EMS will now be used for the firm’s equities and derivatives trading, replacing Bloomberg EMSX. Equities and derivatives trades will now be executed on a single order blotter, with pre-trade data sources integrated to improve decision-making, the companies stated.
The fund held $60.4 billion of equities at the end of H1 2024. Göran Wall, a trader at Alecta, explained the selection process for the new system: “We wanted to deploy a sophisticated solution that could help us optimise pre-trade decision-making and efficiently meet our best-execution obligations on the desk.”
As a partner in the SimCorp Open Platform ecosystem, FlexTRADER EMS is interoperable with SimCorp’s Order Manager OMS, used by Alecta. It has been integrated into Alecta’s operations in less than three months, the firms said.
Alecta is the fifth largest European occupational pension company, with more than US$110 billion AUM. The firm has recently been part of regulatory and legal probes into bribery, relating to its investment in real estate company Heimstaden Bostad. The legal case was dropped by the Swedish prosecutor in August, but concerns about Alecta’s governance and risk management practices remained.
In 2023, the company stated that it was implementing an “improvement programme” consisting of risk reduction and better risk control in its equity portfolio and stronger governance practices. An annual assessment of corruption risk, including that contributed by external suppliers, found that the pension fund had an overall medium risk of improper influencing in 2023.
A number of changes were made to personnel over the year, with Jan-Olof Jackne named chair of the board, Peder Hasslev appointed CEO, Pablo Bernengo taking over as head of asset management and Magnus Tell becoming head of equity.
Over H1 2024, Alecta recorded SEK1,334,584 in AUM, up 6% year-on-year. In its interim report, the firm stated that it was continuing its governance and risk management improvements and conducting asset liability management work to optimise future portfolio allocations for its defined benefit pension.
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