FirstFT: Activist Cevian places €1.2bn bet on UBS

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Good morning.

We have an exclusive story today on UBS. Activist investor Cevian Capital has taken a €1.2bn stake in the Swiss bank, betting that it can double its valuation over the next three to five years.

Cevian, Europe’s largest dedicated activist, has invested just under a tenth of its total portfolio in UBS shares since it rescued Credit Suisse in March, according to people with knowledge of the approach. Cevian is now a top-10 investor in UBS.

Unlike more aggressive US rivals, Cevian prefers to work behind the scenes with its portfolio companies. People familiar with the activist’s strategy said Cevian was not seeking a board seat at UBS and supported current chair Colm Kelleher and chief executive Sergio Ermotti.

While UBS is one of Europe’s most valuable banks, it still heavily trails Wall Street peers. Cevian’s founder explains to the Financial Times why it sees UBS as the “biggest opportunity in global financials”.

Here’s what I’m keeping tabs on today:

• Economic data: The EU publishes its consumer price index, while the CBI releases its industrial trends survey for the UK.

• Results: Accenture, De La Rue and FedEx report.

• UK politics: Home secretary James Cleverly will be grilled by the House of Lords International Agreements Committee on the UK-Rwanda asylum agreement. Today also marks the deadline for the recall petition for Tory MP Peter Bone, which could trigger a by-election in Wellingborough. For more on British politics, sign up for our Inside Politics newsletter by Stephen Bush.

The Financial Times’ award-winning podcast series Hot Money is back. Season two investigates a mysterious murder in a small town that leads to a web of drugs, money laundering and state-sponsored assassinations stretching from Dublin to Dubai. Listen on Apple Podcasts, Spotify or wherever you get your podcasts.

Five more top stories

1. Exclusive: The European Bank for Reconstruction and Development is set to double lending to Ukraine after shareholders agreed a €4bn capital increase. The EBRD is already the largest institutional lender to Ukraine’s corporate sector and has issued about €3.7bn in loans since the start of Russia’s full-scale invasion. Here’s how much its annual lending to Kyiv will increase.

• The FT View: To ensure cash flows to Ukraine next year and that the EU can remain an effective geopolitical player, the bloc must find ways to tackle its “Orbán problem”, write the FT’s editorial board.

2. The US has convinced more than a half dozen allies to join a strengthened naval task force in the Red Sea amid mounting attacks by Iran-backed rebels on commercial shipping that have driven oil prices higher. The announcement came just hours after BP, a large producer of oil in Iraq and gas in Oman, said it was halting all shipments through the waterway, citing the “deteriorating security situation”.

3. Exclusive: Most companies are not ready to deploy generative artificial intelligence at scale, according to Accenture’s chief executive. The most hyped technology of 2023 is still in an experimental phase at most companies and macroeconomic uncertainty is holding back IT spending generally, said Julie Sweet ahead of her company’s results, to be published today. Read her full interview with the FT.

4. Apple will stop selling its smartwatches through the company’s US stores before Christmas after losing a patent infringement case, dealing it a blow during the holiday sales season. A US judge found in January that a blood oxygen sensor on recent Apple Watch models infringed patents owned by medical device maker Masimo.

5. Exclusive: The UK economy is at risk of a “hard landing”, Pimco’s chief investment officer has warned. Daniel Ivascyn told the FT he has been running larger than usual bets on UK government bonds relative to those from the US, in anticipation that the UK will suffer greater economic strain. Here’s more from one of the world’s biggest active bond fund managers.

FT Person of the Year

Before Wegovy and Ozempic, the only truly effective treatment for obesity was bariatric surgery, which is expensive and sometimes risky. Now, the readily available drugs could have a profound impact on healthcare, society and our relationship with food. For leading the company that produced these game-changing treatments through a model of patient, persistent but transformational innovation, the Financial Times has chosen Lars Fruergaard Jørgensen as its Person of the Year.

We’re also reading . . . 

• Israel-Hamas war: Fear and anger stalk Israeli residents who live along the border with Gaza, where they say the army must “finish the job” in the war against Hamas.

• Monetary policy: With politics likely to become more dysfunctional, central bankers need to reinstate macroeconomic guardrails, writes former Reserve Bank of India governor Raghuram Rajan.

• Zimbabwe: Critics say the contentious circumstances of a recent by-election are aimed at securing President Emmerson Mnangagwa’s grip on power.

• Pro-parent policies: States that want to encourage people to have more kids should think about making it easier to raise them, writes Stephen Bush.

Chart of the day

India’s central bank announced measures to curb rising stress in the burgeoning market for unsecured consumer loans, after data showed the share of delayed payments was rising. The move hit fintech lenders such as Paytm, which had been increasingly relying on riskier borrowing for growth.

Take a break from the news

Over 130 years, Maxim’s in Paris has played host to everyone from Proust to Piaf, Cocteau to Callas, Delon, Gainsbourg and Birkin. Now the legendary restaurant off the Place de la Concorde has been given a makeover.

Additional contributions from Benjamin Wilhelm and Gordon Smith