European Holdings Likely to `Underperform' Assets, UBS Says

European holding companies are more likely to ``underperform'' their assets than before, according to UBS AG, which named Dinamia Capital Privado SCR SA, a Spanish venture capital company, GIMV NV, Belgium's biggest buyout company, Criteria CaixaCorp, the holding company for the investments of Spain's biggest savings bank, and Investor AB, the Wallenberg family's holding company, as its ``top picks.''

``We think that holding company investment in these markets is still a challenging exercise, especially since most long-shorts are difficult to implement due to short selling restrictions,'' Milan-based analyst Alessandro D'Erme wrote in a note to investor today. ``However some names offer interesting valuations - as well as some comforting downside protection.''

The brokerage downgraded Premafin Finanziaria SpA, the company controlled by the Ligresti family, and Industrivarden AB, the Swedish investment firm with stakes in large domestic companies, to ``sell,'' and cut its recommendations on Wendel, Europe's second-largest publicly traded private equity firm, Sonae Capital SGPS SA, the Portuguese tourism company, and Orkla ASA, Norway's largest consumer-goods company, to ``neutral.''

UBS upgraded Gemina SpA, which owns the manager of Rome's airports, and Eurazeo SA, a Paris-based buyout and investment company, to ``buy.''