- Jeff Ubben will leave the $ 16 billion hedge fund ValueAct Capital to start a new fund focused on environmentally and socially responsible investment, the Financial Times reported Tuesday.
- The activist investor hopes to use the fund, called Inclusive Capital Partners, to “demonstrate that there is a return” on impact investing.
- “The finances are already done. Everyone bought everyone else with low-cost debt,” Ubben said. “Each industry has about three players. Elizabeth Warren is right.”
- The move follows a yearlong transition for Ubben from ValueAct Leader to transfer his power to successors.
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Jeff Ubben is moving from ValueAct Capital to a decidedly greener company, The Financial Times reported Tuesday.
The activist investor plans to create a new hedge fund focused on environmentally and socially responsible investments. The fund, called Inclusive Capital Partners, will be launched in partnership with Lynn Forester de Rothschild, CEO of the Coalition for Inclusive Capitalism, according to the Times. Ubben hopes to use the strategy he used with the ValueAct primary fund and focus on implementing strategy changes in specific companies.
“Companies, as it is governed today, with investors asking for more current earnings and more buybacks, etc., are not working for society or nature,” he told the Times. “But I have to show that there is a return, because otherwise … you’re not really changing anything.”
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Using ValueAct for responsible investing and hedging strategies confused investors, Ubben added. Clients interested in ESG factors feared they were missing out on profits, while those piling up in the company’s hedge fund worried about being considered ignorant of environmental and social problems, according to the Times.
Many of the opportunities in traditional investing are running out and creating a greater incentive for impact strategies, Ubben said.
“The finances are already done. Everyone has bought everyone else with low-cost debt. Everyone has maximized their margin,” he said. “They’ve bought back all their shares … There’s nothing there. Every industry has about three players. Elizabeth Warren is right.”
The move comes after a prolonged transfer of power from Ubben to others in the $ 16 billion hedge fund. The investor went on to play the role of chief investment officer in 2017 and relinquished the title of CEO last year to his successor.
Ubben will continue to manage a $ 1 billion impact fund at ValueAct during the transition. Still, the firm’s founder is confident that it is time for the business to continue without him at the helm.
“ValueAct no longer needs to be ‘Jeff Ubben’s ValueAct’,” said Ubben. “I haven’t put a stock in the main fund in three years … That’s a problem for ValueAct, as they should be able to get past me.”
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