June 18, 2008 / 7:17 AM / in 10 years

UBS investor Olivant ups stake, wants urgency

ZURICH (Reuters) - Activist investor Olivant has raised its stake in Swiss bank UBS UBSN.VX to 2.5 percent and backed its recent rights issue, but there is still an urgent need to clarify strategy, it said on Wednesday.

Olivant, headed by former UBS Chief Executive Luqman Arnold, said by taking a stake worth about $1.8 billion it was “demonstrating its belief in the potential restoration of shareholder value achievable through decisive action on the part of the UBS board”.

The boutique investment group in April called on UBS to reform and consider splitting up after the bank -- once a rock of Swiss financial prowess -- was hit by massive losses on risky investments and saw its reputation battered.

Arnold said he wanted to sell off asset management and could sell the investment banking arm, reducing the group to its wealth management rump. For a story, click on

Olivant held a 1.1 percent stake two months ago and has gradually bought more shares.

By 4:27 a.m. EDT UBS shares were down 2.2 percent at 25.22 Swiss francs. Europe’s DJ Stoxx Banking index .SX7P was down 1.5 percent.


Olivant said in a statement there remained an urgent need to clarify future strategy to allow UBS to attract and retain talented bankers.

It said it welcomed and supported a number of the recent decisions and actions taken by the board, and was engaged in a “constructive dialogue” with the chairman and board members.

UBS wrapped up a 16 billion Swiss franc ($15.33 billion) rights issue last week, with 99.4 percent of the rights taken up in a second effort to revive finances ravaged by the global markets crisis.

The bank is Europe’s biggest casualty of the global crisis triggered by risky U.S. home loans, and has written $37 billion off in dud investments.

Olivant’s move contrasts with that of other shareholders, such as Frankfurt Trust, which has pared back its stake in UBS.

Olivant last year failed with a rescue bid for troubled British lender Northern Rock.

It is just over six years since Arnold was ousted from UBS. He was chief executive for less than a year and left after losing a power struggle with Chairman Marcel Ospel, who quit earlier this year as the bank’s troubles mounted.

Reporting by Katie Reid in Zurich and Steve Slater in London; Editing by Quentin Bryar and Sue Thomas

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