Hedge Funds To Seek UBS Split?

Jul 23 2007 | 12:34pm ET

Another continental banking giant may face hedge fund calls for a breakup, after the Sunday Times revealed Harris Associates’ “secret” $1 billion stake in UBS.

The $73 billion Chicago hedge fund, run by David Herro, now owns roughly 1% of UBS. The Sunday Times also reports that London-based hedge fund Lansdowne Partners has also built a significant stake in the troubled Swiss bank.

Analysts, experts and investors, echoing London hedge fund The Children’s Investment Fund’s efforts to break up Dutch banking giant ABN Amro, have called on UBS to split its investment banking and asset management divisions to help improve its disappointing performance. Earlier this year, UBS took a US$300 million hit when it shut down its hedge fund unit, Dillon Read Capital Management, for its dismal performance, and two weeks ago fired CEO Peter Wuffli.

Harris Associates is perhaps best known for its successful campaign to boot the Saatchi brothers from their eponymous advertising agency, Saatchi & Saatchi, in 1994.

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