Swedish activist investor Cevian Capital AB has bought almost 5% of Aviva Plc, placing it among the insurer’s top three holders.

Christer Gardell, managing partner at Cevian, said the Stockholm-based investor now holds 4.95% of Aviva after purchasing almost 195 million shares. Cevian plans to use the stake to target bigger cost cuts and shareholder returns, he said.

The London-based insurer’s costs are already “moving in the right direction,” but there’s potential to be more ambitious and target “at least” 500 million pounds ($708 million) in cuts by 2023, Gardell said in an email. And with the right strategy, he says Aviva’s share price could top 8 pounds, which is almost double its value today and four times the low it reached in March last year when the pandemic hit. The dividend could move to 45 pence, roughly twice its current level, he said.

Christer Gardell Photographer: Michael Nagle/Bloomberg

Cevian’s purchase of the Aviva stake marks its third major investment in the U.K. insurance sector, following investments in RSA Insurance Group Ltd. and Old Mutual Ltd., which is based in Johannesburg but traded in London.

“We’ve followed Aviva closely for nearly a decade, both as a peer of our former core holding, RSA, and as an investment candidate in its own right,” said Niko Pakalen, a Cevian Capital partner. “We’ve had a series of constructive discussions with the new leadership over the last quarters, and began building up our position in early 2021.”

Cevian, which describes itself as the “largest and most experienced dedicated activist” in Europe, has more than $16 billion under management. Its largest stakes currently include ABB Ltd, Ericsson AB and Nordea Bank Abp.

Read more: Aviva’s New Boss Has One of Toughest Jobs in European Finance: Opinion

Aviva has been offloading its non-U.K. businesses in a move welcomed by shareholders. It sold eight units for 7.5 billion pounds, including businesses in France, Italy and Turkey, with proceeds expected by the end of 2021, it said in a trading statement in May. The company has been paying down debt and has said there will be a “substantial return of capital” to shareholders, without giving further details on how much that will be.

Cevian expects the firm to continue on that path, and then return 5 billion pounds to shareholders next year.

Aviva shares rose as much as 3.6% in London, touching the highest since January 2020. Before today, the stock had gained 26% this year.

Aviva “has the potential to become a focused and well-capitalized market leader that produces profitable growth, generates significant cash, and is highly appreciated in the equity markets,” Gardell said. Chairman George Culmer and CEO Amanda Blanc are “committed to crystallizing this potential and delivering substantial shareholder value,” he said.

“We regularly engage with investors and welcome any thoughts which move us toward our goal of delivering long-term shareholder value,” a spokesperson for Aviva said.

–With assistance from Benjamin Robertson and Charles Daly.

Top photograph: A pedestrian passes a sign outside the headquarters of Aviva Plc in London, on Friday, March 7, 2014. Photographer: Matthew Lloyd/Bloomberg.