Sweden’s largest pension fund, Alecta, is facing losses of almost $2 billion as a result of a failed investment strategy that made it one of the biggest shareholders in two collapsed US banks and another that is embroiled in the ongoing banking crisis.

The scale of the losses has become clearer since the private pension group sold all of its First Republic Bank stake at a loss of 7.5 billion kronor ($728 million), according to Chief Executive Officer Magnus Billing. That adds to anticipated losses of 8.9 billion kronor and 3.2 billion kronor in Silicon Valley Bank and Signature Bank, respectively.

“The uncertainty about First Republic’s future was too great, partly due to the fact that the lender was downgraded to junk status,” Billing said in an email after Bloomberg News obtained a copy of a letter that Alecta wrote to the Swedish Financial Supervisory Authority.

While Alecta is large enough to weather the losses without impact on the 2.6 million Swedes whose private savings are invested with the fund, the news has stoked public outrage in Sweden — particularly since it recently exited stakes in two local lenders, Svenska Handelsbanken AB and Swedbank AB, and chose to invest in the niche US banks. SVB catered primarily to the startup community, while Signature targeted the crypto community.

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