Cevian Capital spends €1.2bn on a 1.3% stake in UBS

Activist investment firm Cevian Capital has invested €1.2bn to take a small stake in Swiss banking giant UBS, saying it predicts the stock will double in price.

In statement on Tuesday morning the Europe-focused firm said the investment amounted to a 1.3% shareholding in the Zurich-headquartered lender.

“Cevian sees significant value potential in UBS," said Cevian's managing partner and co-founder Lars Förberg.

"The board and management team are doing an excellent job integrating Credit Suisse and we have been impressed by their commitment to further improve UBS. Strengthened by the acquisition, UBS is the largest global wealth manager with unique market positions and financial strength," Förberg said.

Shares in UBS were up 1.7% at CHF25.77 by 0915 on the SIX Swiss Exchange, with a year-to-date gain of nearly 50% bringing it in line with levels not seen since the financial crisis of 2008.

Cevian, whose long-term capital base is mainly provided by pension funds, endowments, foundations and sovereign wealth funds, said if UBS can can close its valuation gap to Morgan Stanley of two times price-to-tangible book, "the UBS share is worth CFH50".