Cevian Capital Reportedly Bets Big On UBS, Eyes Competitive Edge Over Morgan Stanley In Wealth Management

Swedish activist investor Cevian Capital AB reportedly made a major investment in UBS Group AG UBS, targeting the Swiss bank's potential to surpass Morgan Stanley MS in global wealth management.

Cevian has acquired approximately 1.3% of UBS this year, emerging as one of the bank's largest shareholders. Cevian's investment, amounting to €1.2 billion, is driven by confidence in UBS's ability to successfully integrate Credit Suisse and potentially double its share price in the next two to three years, reported Bloomberg.

"We think UBS should at least be valued on a par with Morgan Stanley," stated Cevian co-founder Lars Förberg in an interview with Bloomberg Television, highlighting the substantial downside protection UBS offers.

Since announcing the emergency rescue of Credit Suisse in March, UBS shares have surged by about 50% and the CEO Sergio Ermotti has indicated that the bank will provide more details on its post-merger strategy in February.

To challenge Morgan Stanley's dominance and boost its valuation, UBS needs significant growth in the U.S., the largest wealth-management market, as per the report. Cevian anticipates a 20% return on equity for UBS in about five years.

According to the report, Cevian has a history of impactful investments in the banking sector, including stakes in Danske Bank A/S DNKEY and Swedbank AB SWDBY and a board position in Nordea Bank Abp NRDBY.

Price Action: UBS shares are trading higher by 2.98% at $30.07 in premarket on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Company