Activist investor Jeff Ubben trades ValueAct for social investment

Legendary activist investor and founder of ValueAct Capital, a $ 16 billion hedge fund, Jeff Ubben (pictured) has set out to launch a new environmental and social impact investment firm.

Ubben’s departure from ValueAct, founded in 2000, comes after a transfer of power of several years. He relinquished the position of Chief Investment Officer in 2017 and the post of Managing Director earlier this year to his handpicked successor, Mason Morfit.

“ValueAct should no longer be Jeff Ubben’s ‘ValueAct’,” Ubben told the Financial Times on Tuesday. “I haven’t put any shares in the main fund for three years. . . This is a problem for ValueAct, as they should be able to pull me away from me. “

Ubben is focused on his new venture – a hedge fund called Inclusive Capital Partners, which he co-founded with Lynn Forester de Rothschild, managing director of the nonprofit Coalition for Inclusive Capitalism, and two former colleagues from San Francisco. ValueAct.

The seasoned investor, who has amassed a fortune of $ 400 million, sees social impact as the next logical step for activist hedge funds. Known for his friendlier approach to activism which avoids public battles with target companies in most cases, he seeks to emulate the approach. he used when running the flagship product of ValueAct.

“Businesses as they are governed today with investors asking for more current returns and more buyouts etc. are not working for society or nature,” he said. “But I have to prove that there is a return [in long-term impact], because if not . . . you really don’t change anything.

Activist investors can still “bully small businesses into selling to private equity,” he said, but it will only yield modest profits.

“The funding is, like, over. Everyone bought everyone with low cost debt. Everyone maximized their margin. They bought back all of their shares. . . There is nothing there. Each industry has about three players. Elizabeth Warren is right.

An impact fund and a traditional fund under one roof at ValueAct can be “confusing” for investors, said Ubben. “I don’t think these two strategies coexist peacefully,” Ubben said. Pushing companies to tackle environmental and social issues, on the other hand, can generate big returns, he said.

“When you talk about tackling climate change with a business solution, that’s the biggest problem in the world. It’s like a 10X your money transaction. “

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