Tue, Dec 19th 2023
The activist investor Cevian has invested in the major bank UBS and believes it is capable of great things.
The Swedish investment company has bought a 1.3 percent stake in UBS shares worth 1.2 billion euros.
Cevian has identified “significant” potential in the valuation of UBS following the takeover of Credit Suisse, according to a press release issued on Tuesday. Cevian co-founder Lars Förberg was quoted as saying that the bank had done an “outstanding” job in integrating CS.
UBS is now the largest global asset manager with a unique market position and financial strength. If the valuation gap to the US bank Morgan Stanley (with twice the price to tangible book value) is closed, the UBS share would be worth CHF 50, according to Förberg.
The Financial Times had previously reported on Cevian’s investment in UBS. Cevian co-founder Lars Förberg spoke to the business newspaper of the “biggest opportunity in the global financial sector”.
The investment firm assumes that UBS could double its valuation in the next three to five years, the FT continued. UBS is currently valued as an average European bank and not as a leading global asset manager. Förberg is also quoted as saying that he believes UBS could become significantly more profitable in the long term.
Cevian is now invested in UBS shares with just under a tenth of the total portfolio, the newspaper writes, citing people familiar with the matter. This makes the Swedes one of the top 10 shareholders in the major Swiss bank.
Cevian has been following UBS for around 15 years, the FT writes, citing insiders. Before the collapse of Credit Suisse, the company had also considered taking an activist position in CS. However, the investment was deemed too risky.
Cevian prefers to work behind the scenes: The activist did not seek a board seat at UBS and supported Chairman Colm Kelleher and CEO Sergio Ermotti, say people familiar with the matter, according to the FT.
According to the article, US asset management heavyweights such as Fidelity and Capital Group have also significantly increased their UBS holdings this year. UBS did not wish to comment on the FT article.
The evening before, the shares of the big bank closed at 25.35 francs on the stock exchange. This means that they are up a full 47 percent in the year that will soon come to an end. Last Friday, they reached a multi-year high of 26.28 francs. They have not been this expensive for over 15 years.
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