Apparently they are limited to investing 5% of the fund's money in banks.

Turns out they used 2 of those 5% for investing in these banks.

It is not a disaster though, not even close to a disaster. And talking about banking and market economy, they most likely gained much more money from that than they lost. It just happened very quickly .

Not a disaster, but seems conspicuous. Looks like there is a connection between Signature and SVB and First Republic had a big exposure to SVB. So their risk exposure to a single entity such as SVB was pretty high for a pension fund.

Of course, they made a mistake.

I think what they did was invest too heavily in up&coming banks rather than traditional banks. With the rationale that their technology was more modern.

Not that I know of. However they sold their shares in the somewhat stable swedish banks Handelsbanken and Swedbank in the hunt for the more exotic, nieche bank stocks.

The CEO of Alecta even said in an interview that the 50%+ drop of "First Republic bank" isn't a loss because it hasn't been realized yet. It wouldn't surprise me if he had to leave before the week is over.

Last year they sold all their stocks in the Swedish banks Swedbank and Handelsbanken (they held them for 71 years) to buy SVB and similar banks because they wanted to have more profits. It'll take a while to recover.

Holy sh*t. That is just beyond horrible. But it also shows how difficult it is to evaluate a stock. If a pension fund can't - then how should the average amateur investor do it.

Do you think any of these large holders are hedged?

That question comes out often but... Apparently the $2bn realized loss that SIVB took was only about 1/10th of their total unrealized gains. Numbers are floating around now saying there's about $620 billion of unrealized losses among the various banks at the moment (due to the same issue of rates going up after trillions were printed).

Which institution can honestly offer any kind of product hedging against $620 billions of losses without, itself, going bankrupt should people try to exercise their hedge?

Basically the headlines, instead of being: "SVB goes down for it has $20 bn of unrealized losses" would be, instead, "SVB goes down for it has $20 bn of hedged unrealized losses, but the institution which is supposed to cover the hedge is bankrupt for it miscalculated and cannot cover $620 bn".

How would you short a pension fund?

Short the other banks they might have stocks in, is what I think they mean

Not them, but what ever other banks they hold. As they seem to be good at picking the bad ones.

Work till you die.