An activist US fund manager which has been increasing its stake in Bank of Ireland in recent months says it is a long-term value investor in the bank and believes the stock will be "worth significantly more than today's depressed price".

Chicago-based Harris Associates has, until now, not outlined its reasons for investing in the bank.

The firm, which has a reputation as an activist fund, has built up a 4 per cent stake in Bank of Ireland, making it the bank's second largest shareholder. Its stake was worth €392 million yesterday after the bank closed down 0.5 per cent at €9.89. The bank's share price has fallen 43 per cent since the start of the year.

David Herro, chief investment officer with Harris and a well-known shareholder activist, said in an e-mail in response to a query from The Irish Times: "As we are long-term value investors, we feel this is an ideal time to be increasing our stake in the Bank of Ireland. Though things are rough now, the company is well managed with an excellent franchise.

"We anticipate the stock to be worth significantly more than today's depressed price."

Mr Herro has been a strong critic of management at companies in which Harris is an investor.

However, his comments confirm the firm is a value rather than activist investor in Bank of Ireland. Harris is best known in the UK for orchestrating an investor revolt in 1995 that led to the ousting of the Saatchi brothers from the advertising business they founded.