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Just yesterday, it was reported that activist investor Jeffrey Ubben, founder and CEO of ValueAct Capital, made a $2 billion investment in Microsoft (MSFT). In the linked CNNMoney article above, Ubben shrugged off questions about Microsoft's ability to be innovative by saying:
Microsoft provides the plumbing that helps large and small businesses function, he explained. While many have derided Microsoft's inability to innovate, Ubben said that's not such a bad thing. "IT managers don't want constant change."
Looking back at ValueAct's most recent portfolio disclosure, we find that this $2 billion investment will be more than significant for the fund. As of December 31, 2012, ValueActs's holdings were valued at $7.855 billion with Adobe Systems (ADBE), Motorola (MSI), and Valeant Pharmaceuticals (VRX) being the only holdings over one billion dollars ($1.179 billion, $1.609 billion and $1.049 billion respectively). Unlike most funds with a large number of holdings, ValueAct held shares in only 14 different companies AND all of them are up in 2013.
The following 7 holdings are up over 10% YTD (from highest to lowest gains in 2013):
- Intercontinental Exchange (ICE) up 25.41% YTD
- Valeant Pharmaceuticals up 24.14% YTD
- CBRE Group (CBG) up 19.15% YTD
- Adobe Systems up 18.18% YTD
- Willis Group Holdings (WSH) up 16.46% YTD
- Halliburton Company (HAL) up 13.62% YTD
- Motorola Solutions up 11.42% YTD
Other holdings were in (from highest to lowest gains in 2013) Gardner Denver (GDI), Moody's Corp. (MCO), MSCI Inc. (MSCI), Rockwell Collins (COL), KAR Auction Services (KAR), Autodesk (ADSK), and CR Bard Inc. (BCR).
ValueAct is due to report its holdings as of 3/31/13 on or before May 15, 2013. Taking into consideration the size of the Microsoft investment in relation to the recent market value of the fund (25.6%), ValueAct either had a lot of money sitting on the side, raised capital or sold some of its previously disclosed holdings (stay tuned for a 1st quarter update). Either way, ValueAct is on a hot streak this year and investors should take note of the recent acquisition.
Microsoft shares are up 6% in the last 5 days and currently trade just 2% off of their 52 week high of $31.57.