According to WSJ, Morfit, who is the board member of Valeant since 2007, will serve as ValueAct’s chief investment officer. Should Morfit help turn around this company? Very possible!
Activist investor Jeffrey Ubben is handing his $16 billion portfolio to the next generation.
Mr. Ubben’s ValueAct Capital Management LP has tapped Mason Morfit, 41 years old, to serve as the firm’s chief investment officer, entrusting him with the final say on what and when the fund buys and sells.
Mr. Morfit, ValueAct’s president, has served on the board of some of the firm’s biggest bets, including MicrosoftCorp. and Valeant Pharmaceuticals InternationalInc. Mr. Ubben will remain ValueAct’s chief executive.
ValueAct investors long have expected the move, which Mr. Ubben has publicly hinted was in the works. Yet the transition marks a significant rite of passage in the world of activist investors, still largely dominated by the towering personalities that pioneered the strategy of agitating for change at public companies.
While activist investors regularly pressure companies to get serious about succession planning, few have structured their own firms to allow a new generation of leaders to take control. Young partners routinely leave large, established firms to start their own funds rather than wait for the founder to step down, raising questions about the funds’ long-term prospects.
At 55, Mr. Ubben is taking a step back well before many of his peers atop other big hedge funds and private-equity firms. Famed corporate rabble-rouser Carl Icahn is 81. Stephen Schwarzman, the founder of private-equity giant Blackstone Group LP, recently turned 70.
In an interview, Mr. Ubben said he wanted 17-year-old ValueAct to avoid the fate suffered by his father’s investment firm, which collapsed after its founders left.
“This is not something you can do at the end of your term. This is something you have to do well in advance,” he said. “When I’m sitting on a talent like Mason, I’m just not going to let him go, and Mason is going to want to evolve.”
ValueAct has long looked to set itself apart from other activist investors. Mr. Ubben has largely avoided big public fights and has been critical of the aggressive tactics employed by some activists. He has said wants activism to mature into an asset class, like private equity, providing long-term value to companies rather than a quick profit for activists.
Mr. Morfit was among ValueAct’s first hires. He quickly became Mr. Ubben’s right-hand man, racking up charges on his personal credit cards to fly around the country visiting companies. He made partner at 27.
In 2007, Mr. Morfit joined Valeant’s board and helped orchestrate the drugmaker’s strategy of buying up smaller rivals, which eventually led to boosting drug prices. The stock rose steadily for years before collapsing in 2015, after a short seller questioned Valeant’s accounting and press reports brought attention to a little-noticed mail-order pharmacy the company was using to increase sales.
ValueAct still owns a 5% stake in Valeant, and Messrs. Morfit and Ubben said they’ll stick around to help the company work through its problems.
ValueAct’s Microsoft investment in 2013 brought new attention to the firm. It persuaded the software giant to give Mr. Morfit a board seat despite holding a stake of less than 1% and keeping quiet about its plans.
Microsoft Chief Executive Satya Nadella said he has come to rely on Mr. Morfit for an outsider’s view, often seeking out Mr. Morfit’s opinion before pitching the full board on strategic ideas, like his plan to buy LinkedIn Corp. for $26.2 billion in 2016.
“The thing I love about the way Mason approaches things is that he has both a point of view as well as a posture that says I want to learn,” Mr. Nadella said in an interview.
Microsoft stock has returned some 95% since Mr. Morfit was appointed to the board, compared with the S&P 500’s 37% return. ValueAct, meanwhile, has posted average annualized returns of about 15% since its founding in 2000, according to people familiar with the matter.
Mr. Morfit’s presence has typically been behind the scenes, even when he has subtly had an impact on ValueAct’s hometown. When Carrie Fisher died in December, Mr. Morfit, a big Star Wars fan, had flowers placed at a statue of Yoda outside ValueAct’s headquarters, a complex that is also home to Lucasfilm. Days later, it was a budding memorial for fans.
“Goodwill and good relationships will help us out in the future. Every door that we open opens 10 more down the road,” Mr. Morfit said. “I would contrast that to the strategy of every bridge you’re burning, you’re burning 10 more down the line.”
Corrections & Amplifications
Jeffrey Ubben is 55 years old. An earlier version of this article incorrectly stated he is 54.
My name is Samual Lau. I am a long-term value investor and a zealous disciple of Ben Graham. And I am a MBA graduated in May 2010 from Carnegie Mellon University. My concentrations are Finance, Strategy and Marketing.
TimelessInvestor
Morfit, who is the board member of Valeant, will serve as ValueAct’s chief investment officer
According to WSJ, Morfit, who is the board member of Valeant since 2007, will serve as ValueAct’s chief investment officer. Should Morfit help turn around this company? Very possible!
ValueAct’s Jeffrey Ubben Hands Reins to Protégé Mason Morfit
Morfit will serve as firm’s chief investment officer while Ubben remains CEO
Activist investor Jeffrey Ubben is handing his $16 billion portfolio to the next generation.
Mr. Ubben’s ValueAct Capital Management LP has tapped Mason Morfit, 41 years old, to serve as the firm’s chief investment officer, entrusting him with the final say on what and when the fund buys and sells.
Mr. Morfit, ValueAct’s president, has served on the board of some of the firm’s biggest bets, including Microsoft Corp. and Valeant Pharmaceuticals International Inc. Mr. Ubben will remain ValueAct’s chief executive.
ValueAct investors long have expected the move, which Mr. Ubben has publicly hinted was in the works. Yet the transition marks a significant rite of passage in the world of activist investors, still largely dominated by the towering personalities that pioneered the strategy of agitating for change at public companies.
While activist investors regularly pressure companies to get serious about succession planning, few have structured their own firms to allow a new generation of leaders to take control. Young partners routinely leave large, established firms to start their own funds rather than wait for the founder to step down, raising questions about the funds’ long-term prospects.
At 55, Mr. Ubben is taking a step back well before many of his peers atop other big hedge funds and private-equity firms. Famed corporate rabble-rouser Carl Icahn is 81. Stephen Schwarzman, the founder of private-equity giant Blackstone Group LP, recently turned 70.
In an interview, Mr. Ubben said he wanted 17-year-old ValueAct to avoid the fate suffered by his father’s investment firm, which collapsed after its founders left.
“This is not something you can do at the end of your term. This is something you have to do well in advance,” he said. “When I’m sitting on a talent like Mason, I’m just not going to let him go, and Mason is going to want to evolve.”
ValueAct has long looked to set itself apart from other activist investors. Mr. Ubben has largely avoided big public fights and has been critical of the aggressive tactics employed by some activists. He has said wants activism to mature into an asset class, like private equity, providing long-term value to companies rather than a quick profit for activists.
Mr. Morfit was among ValueAct’s first hires. He quickly became Mr. Ubben’s right-hand man, racking up charges on his personal credit cards to fly around the country visiting companies. He made partner at 27.
In 2007, Mr. Morfit joined Valeant’s board and helped orchestrate the drugmaker’s strategy of buying up smaller rivals, which eventually led to boosting drug prices. The stock rose steadily for years before collapsing in 2015, after a short seller questioned Valeant’s accounting and press reports brought attention to a little-noticed mail-order pharmacy the company was using to increase sales.
ValueAct still owns a 5% stake in Valeant, and Messrs. Morfit and Ubben said they’ll stick around to help the company work through its problems.
Microsoft Chief Executive Satya Nadella said he has come to rely on Mr. Morfit for an outsider’s view, often seeking out Mr. Morfit’s opinion before pitching the full board on strategic ideas, like his plan to buy LinkedIn Corp. for $26.2 billion in 2016.
“The thing I love about the way Mason approaches things is that he has both a point of view as well as a posture that says I want to learn,” Mr. Nadella said in an interview.
Microsoft stock has returned some 95% since Mr. Morfit was appointed to the board, compared with the S&P 500’s 37% return. ValueAct, meanwhile, has posted average annualized returns of about 15% since its founding in 2000, according to people familiar with the matter.
Mr. Morfit’s presence has typically been behind the scenes, even when he has subtly had an impact on ValueAct’s hometown. When Carrie Fisher died in December, Mr. Morfit, a big Star Wars fan, had flowers placed at a statue of Yoda outside ValueAct’s headquarters, a complex that is also home to Lucasfilm. Days later, it was a budding memorial for fans.
“Goodwill and good relationships will help us out in the future. Every door that we open opens 10 more down the road,” Mr. Morfit said. “I would contrast that to the strategy of every bridge you’re burning, you’re burning 10 more down the line.”
Corrections & Amplifications
Jeffrey Ubben is 55 years old. An earlier version of this article incorrectly stated he is 54.
Write to David Benoit at david.benoit@wsj.com
About Timeless Investor
My name is Samual Lau. I am a long-term value investor and a zealous disciple of Ben Graham. And I am a MBA graduated in May 2010 from Carnegie Mellon University. My concentrations are Finance, Strategy and Marketing.