With Nordic clean-up done, Cevian prepares new broom for Germany

Sun Mar 23, 2014 10:55am EDT
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By Mia Shanley

STOCKHOLM (Reuters) - Such is the weight of Christer Gardell's voice in Europe that Volvo's share price jumped 4 percent one day in January when a Swedish business daily ran a front-page story on the activist investor calling on the truckmaker to "start delivering".

Gardell, once called a capitalist "butcher" by Swedish media, has emerged more than a decade after co-founding Cevian Capital - now a $12 billion activist fund - as Europe's biggest activist investor and one of its most influential.

Having established increasing influence in the Nordics - Cevian said this week it had nearly doubled its stake in Volvo over a six-month period - he is now trying to strengthen its presence in Germany.

Gardell's knack for spotting value in struggling companies and his ability to implement strategic change - whether by management shake-up or asset sales - has helped him chalk up many successes in the Nordics.

Its second fund, which launched in 2006, has returned around 180 percent since inception, beating the MSCI Europe Index, which has returned 36 percent in the same period. Figures from research firm Evestment show Cevian is among the 15 largest hedge funds in Europe and 30 largest in the world.

Cevian invests in stable industries and overlooked companies that it can repair and sell at a premium - preferably double within three to five years. It keeps a portfolio of 12 core holdings, including big European blue-chips such as Volvo, British security firm G4S and German conglomerate ThyssenKrupp.

"We like companies which have strong market positions and solid cash flow," Gardell told Reuters in an interview in his Stockholm headquarters, surrounded by tennis memorabilia - one of his greatest passions.

"Many of those are industrial companies in old-fashioned industries, and they are from this perspective still very low-priced."   Continued...

Co-founder of Cevian Capital, Christer Gardell, poses in Stockholm in this December 20, 2007 file photo. REUTERS/Henrik Montgomery/TT News Agency