Cevian takes $1.95b stake in UBS

The news: Activist investor Cevian is taking a €1.2 billion ($1.95 billion) stake in UBS, as the Swiss bank seeks to outpace Morgan Stanley as the world's leading wealth management firm, the Financial Times reported, citing unnamed sources.

The numbers: The €1.2 billion investment increases Cevian’s stake to 1.3%, making it one of UBS’ top ten investors. Cevian believes that UBS will double its valuation in the next three to five years, with Cevian cofounder Lars Förberg stating that should UBS close its valuation gap with Morgan Stanley, its share will be worth 50 Swiss francs ($85.33). UBS shares have risen 2.8% during trading on Tuesday.

The context: In a deal brokered by the Swiss state, UBS acquired Credit Suisse in an emergency rescue in March 2023. Shares in the bank have doubled since the acquisition, and UBS has been positioning itself to overtake Morgan Stanley, a US competitor with large wealth management operations.

What they said: Förberg told the FT: “From an earnings and valuation point of view, UBS should really be seen as a wealth manager with a banking license, not a bank with a wealth management business […] The notion that large companies can’t be changed is not right. There are many levers you can pull […] we believe that UBS can become significantly more profitable over time.”