Eric Knight Keeps an Eye on UBS Share Price

Eric Knight

Eric Knight

Knight Vinke, the Monaco-based hedge fund, made a 100 percent profit from its investment when it sold the stake in UBS at the end of last year. But its boss hasn't given up on the bank just yet.

Knight Vinke boss Eric Knight wants to repeat it all: having sold his holding of about 1 percent in Switzerland's biggest bank at the end of 2015, he is now eagerly awaiting a further decline of the share price before buying a new stake.

«We sold our position at just under 20 francs per share, almost twice the level at which we bought,» Knight told «Reuters». «The share price has gone down around 25 percent since then. If it keeps falling, we might take another look.»

Strategy Dispute

For years, Knight hat been at loggerheads with UBS, demanding the bank to divest its investment division. He remains convinced that UBS will have to do so earlier or later – because of regulatory demands, a financial crisis or out of conviction.

The reason why Knight Vinke sold the stake in UBS was the decision by the bank to raise the amount of risk-weighted assets allowed at the investment bank. «I found it shocking that, in the third quarter, the board allowed the investment bank to go through the 70 billion franc cap on risk-weighed assets with no consultation,» Knight told «Reuters».

Knight's Ideas Didn't Resonate, UBS Says

UBS reacted in writing to the statements made by its former shareholder, saying that Knight's ideas clearly never resonated and that investors understood that the bank did not change the risk profile of its investment bank.

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