Cevian Capital, a Swedish investment fund, has recently acquired a stake in UBS, the world’s leading asset manager. With an investment of 1.2 billion euros, Cevian Capital is now one of the 15 largest shareholders of UBS, positioning itself as a major player in the only remaining major Swiss bank.
As an activist investor who usually targets troubled companies, Cevian Capital aims to influence company management or structure to improve the business model and increase the share price. Despite not seeking a seat on UBS’s board of directors, the fund believes that UBS is undervalued compared to its American competitors, particularly Morgan Stanley. Lars Förberg, co-founder of Cevian, UBS shares could be worth twice as much if the valuation gap with Morgan Stanley is closed.
UBS’s ambitions in the US market align with Cevian’s belief that the bank is undervalued. Although UBS aims to become a global asset manager, its history of losses in US investment banking poses a challenge. UBS is cautious about expanding investment banking to avoid weakening its risk profile and jeopardizing share price growth, as asset managers generally receive higher valuations than investment banks.
