May 31, 2017 / 2:23 PM / 4 months ago

Cevian, the gentleman activist of Europe

LONDON, May 31 (Reuters) - Cevian Capital’s intervention at Ericsson brought an immediate demonstration of investors’ faith in the asset manager’s softly, softly brand of activism, with shares in the Swedish company jumping nearly 6 percent on Wednesday.

Keeping a steady hand on its 15 billion euros ($16.77 billion) of assets, Cevian prides itself on working with companies’ management teams, eschewing the famed aggressive activism of the likes of Bill Ackman, Carl Icahn and Chris Hohn.

While other activist investors engage in proxy battles or public campaigns -- as in the recent case of TCI Fund Management calling for France’s Safran to cancel its planned takeover of Zodiac Aerospace -- Cevian looks to influence from within, often seeking board positions at the businesses in which it invests.

Cevian managing partner Christer Gardell, who on Wednesday pressed for swift implementation of Ericsson’s turnaround plans, will join the mobile telecoms equipment maker’s nomination committee, though he declined to comment on whether Cevian would seek a board position.

The 5 percent-plus stake built by Cevian makes it Ericsson’s second-biggest owner in terms of share capital behind Investor AB, which welcomed the prospect of the firm’s input.

Investor AB and fellow major stakeholder Industrivarden both said it was positive that other investors show interest in Ericsson but would not comment on any possible impact or strategy from Cevian specifically.

“We see no reason why our ambitions here should differ from the other major owners,” Cevian’s Gardell said.

“We think all owners want to make sure that this turns out as good as possible as quickly as possible.”

What also sets Cevian apart from other activists is that it makes only a few new investments each year and holds these for an average of five years, sometimes longer.

It has held one of its most successful investments, Denmark’s Danske Bank, since 2011.

A little patience goes a long way, it would seem. Having bought Danske shares at 75 crowns in November 2011, Cevian now owns stock that was priced at 249.10 crowns per share as of 1100 GMT on Wednesday -- a rise of more than 230 percent.

Editing by David Goodman

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