UBS, the world’s leading asset manager, has recently received a significant investment from Cevian Capital, a Swedish investment fund. The fund views UBS as undervalued and believes that it has boosted the bank’s ambitions. 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, 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. According to Lars Förberg, co-founder of Cevian, UBS shares could be worth twice as much if the valuation gap with Morgan Stanley is closed.
UBS has been cautious about expanding its investment banking activities in recent years due to its history of losses in this area. However, its ambitions in wealth management and investment banking align with Cevian’s belief that the bank is undervalued. As asset managers generally receive higher valuations than investment banks, UBS is careful not to weaken its risk profile and jeopardize share price growth by overexpanding into this area.
