UBS CEO Sergio Ermotti has long complained about the low valuation of his bank’s shares. The situation could now be about to change.
Sergio Ermotti regularly expressed frustration about what he perceived as a low valuation of the banking giant. The reason he often cited in interviews is that UBS is still considered an investment bank. «We are the most expensive investment bank and the cheapest asset manager in the world,» he used to complained.
The shares rose as high as 20 Swiss francs in January, but slipped lower again. Apparently the shares lack «fantasy», in stock market jargon. Presently, a UBS share costs 16 francs. «Totally laughable,» Ermotti has noted.
Signal for Investors?
Things could however change now. According to a regulatory publication from the U.S. supervisory authority SEC, U.S. hedge fund manager David Tepper, using his investment vehicle Appaloosa, recently bought UBS shares in a big way. Apparently he sees potential in the stock, buying as he did some seven million shares worth about 112 million francs.
Not a huge amount of course considering the total valuation of UBS, but it could be a signal that perceptions of UBS are shifting, which may encourage other investors.
Top-Earning Hedge Fund Manager
And Tepper isn’t just anyone. The 60-year-old finance expert is well regarded on Wall Street, and a decade ago was the top earner among hedge fund managers, particularly those in the banking sector. His fortune is estimated at about $11 billion.
In the wake of the financial crisis Tepper offloaded some banking titles, according to the SEC, and is now buying UBS stock. Tepper also has a reputation for slowly increasing his share holdings, so this could herald rosier times for Sergio Ermotti.
