(Adds comments on Snap IPO, firm background)
By Lawrence Delevingne and Trevor Hunnicutt
NEW YORK Feb 22 Jeffrey Ubben, the chief
executive officer of activist investor ValueAct Capital, told
Reuters on Wednesday that his firm had been taking money out of
the capital markets as valuations have become overextended,
leaving it with $3 billion in cash.
"I really feel that the large-cap activist plays are very
treacherous with high PEs (price-to-earnings) and not a lot of
growth," Ubben said, speaking at the Reuters "Future of
Shareholder Activism" event in New York.
Ubben said that he was not focusing on any particular sector
but instead looking for bets on idiosyncratic, mid-sized
companies such as spin-offs and "weird" corporate structures.
ValueAct, based in San Francisco, manages around $16
billion. The fund's largest holding is a $2.4 billion stake in
Microsoft Corp, the software company where ValueAct
partner Mason Morfit is also a board director.
Ubben also weighed in on the administration of U.S.
President Donald Trump, saying "everything about Trump I think
is inflationary" while citing policies like a potential border
tax. But he added that the looming increase in interest rates
were more of a concern as a board member.
Ubben said he got "super lucky" with the Trump
administration's proposed financial deregulation measures, which
caused bank shares - including current ValueAct holding Morgan
Stanley - to spike. He said he sold some shares in Morgan
Stanley following its price increase.
On the coming initial public offering of Snap Inc,
Ubben said that he has no problem with shares that do not
initially have voting rights as long as they eventually allow
for shareholders to have their say.
"I understand it," he said. "If that's what it takes to get
growth companies public and let the public participate in
Ubben was a fund manager at Fidelity and a managing partner
at private equity firm Blum Capital before founding ValueAct in
Ubben is a long-time advocate of giving CEO's more
stock-based compensation tied to the company's total shareholder
return. In an opinion article he published in 2012, he said the
TSR model can bring a healthy appetite for risk to boardrooms
and encourage growth.
ValueAct disclosed earlier this month a 7.1 percent stake in
pharmaceutical company Bioverativ Inc. The fund also
has a $1 billion-plus stake in media company Twenty-First
Century Fox Inc.
(Reporting by Lawrence Delevingne and Trevor Hunnicutt; Editing
by Jennifer Ablan, Andrew Hay and Lisa Shumaker)