Activist hedge fund manager studied this troubled stock for a year before finally buying a big stake

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Christian Sewing, the new CEO of Deutsche Bank, speaks at the Deutsche Bank annual shareholders' meeting on May 24, 2018 in Frankfurt, Germany. Shareholders, frustrated by years of poor performance by Deutsche Bank, are calling for Achleitner to step down.

A former J. P. Morgan Chase executive turned activist hedge fund investor has taken a 3.1 percent stake in Deutsche Bank as the beleaguered German lender works on a turnaround story.

Douglas Braunstein, founder and managing partner of Hudson Executive Capital and J. P. Morgan's former CFO, said in an interview that the firm has taken on the stake over the last few months. It is Hudson's third financial services investment, after Comerica and CIT, and would make Hudson one of Deutsche Bank's biggest shareholders, according to FactSet. The buy-out firm Cerberus Capital took a similar sized stake last year.

Shares of Deutsche Bank jumped nearly 3 percent on Thursday, but they are still down more than 46 percent this year.

Deutsche Bank has made several key changes, announcing a restructuring and a new CEO, Christian Sewing, earlier this year. Deutsche Bank is now focused on its retail and asset management businesses in Germany and its corporate banking services for European companies, after retreating from several markets including the U.S. "People were so negative on this name that they lost the forest through the trees," Braunstein told CNBC.

He said the firm studied the bank as a possible investment for a year before jumping in.

"We worked on this for 12 months, and eight of those months, we had done our work and didn't think the value was right and there wasn't a clear path to success," Braunstein said.

The CEO change in the spring was the catalyst. "My comfort level in making the investment is Christian's reputation, his history, his capabilities, all revolve around execution. So you've got the right strategy and the right guy in place to execute," the investor told CNBC.

In a statement on Thursday, Deutsche Bank said, "We welcome Hudson Executive's investment in Deutsche Bank. Doug Braunstein and Hudson Executive come with deep backgrounds investing in financial services companies. We appreciate Hudson Executive's confidence in our ability to execute on our strategic objectives."

"Before we made our investment, we were actively engaged as you'd expect any potential investor to be, talking with senior management about their strategic agenda and to an incredibly high degree, our agenda lined up with the agenda the new CEO and CFO were articulating," he said.

Braunstein's Hudson Executive has $1.4 billion of assets under management. It has a roster of former finance executives advising it on investments, including former J. P. Morgan CEO William Harrison, former Wells Fargo CEO Richard Kovacevich, and New York Private Bank and Trust's Howard Milstein. In addition to being CFO, Braunstein also once ran J. P. Morgan's investment bank.

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