ValueAct

Investment Management

Mentions

Podcasts

Episodes

Podcast consensus

Points of consensus

▶ValueAct employs a long-term, engagement-focused strategy, preferring to take board seats to influence management constructively rather than launching public proxy fights.Apr 2026

▶The firm has a significant track record of influencing major strategic shifts at large corporations, such as prompting Microsoft's capital reallocation away from money-losing hardware and toward cloud services.Apr 2026

▶ValueAct has a substantial and growing focus on the Japanese market, having invested over $7 billion since 2017 and engaging in high-profile situations at companies like Olympus and Seven & i Holdings.Apr 2026

▶The firm's core investment thesis targets high-quality but underperforming companies suffering from 'diseases of abundance,' where strong cash flow masks poor strategic decisions.Apr 2026

Points of debate

▶While ValueAct's preferred method is 'quiet activism,' the firm has resorted to rare proxy contests, such as with Seven & i Holdings in Japan, indicating its collaborative approach is not always sufficient to enact change.Apr 2026

▶The firm's philosophy emphasizes long-term holdings, exemplified by a 12-year investment in CBRE, yet partners acknowledge prematurely selling successful investments like Microsoft and MSCI, missing out on further gains.Apr 2026

▶ValueAct's strategy was shaped by a post-scandal environment favoring improved governance, but its early, high-profile investment in Martha Stewart's company during her insider trading investigation shows an appetite for complex and controversial situations.Apr 2026

▶The firm targets high-quality companies for its portfolio, but has also made acknowledged mistakes, such as its investment in Rolls-Royce, which it described as 'biting off more than we could chew.'Apr 2026

Key themes

▶Quiet Activism and Constructive EngagementApr 2026

ValueAct's core strategy is to act as a constructive, long-term owner in public markets, similar to a private equity investor. The firm has held over 50 board seats and engaged in only two proxy contests in its 25-year history, preferring to work with management internally to effect change.

This approach requires deep operational expertise and strong interpersonal skills to build trust with management teams, making the firm's reputation and the specific partners involved critical to its success.

▶Targeting 'Diseases of Abundance'Apr 2026

The firm's investment thesis focuses on high-quality companies with strong cash flows that enable poor strategic decision-making and a lack of focus. At Microsoft, for example, ValueAct's 'Shadow P&L' analysis revealed that profitable divisions were subsidizing annual losses of $4-6 billion in hardware.

This thesis suggests ValueAct's ideal targets are not distressed turnarounds but established, profitable companies in need of strategic realignment, potentially offering a more favorable risk-reward profile than traditional value investing.

▶Strategic Focus on JapanApr 2026

Since 2017, ValueAct has made a significant commitment to the Japanese market, investing over $7 billion across 12 disclosed companies. Engagements include refocusing Olympus on its core medical device business and participating as a minority investor in the take-private of TopCon.

ValueAct's substantial, long-term investment in Japan indicates a strong belief that ongoing corporate governance reforms in the country are creating unique opportunities for its engagement-led model that are less available in more saturated markets.

▶High-Stakes Corporate GovernanceApr 2026

ValueAct has a history of engaging in complex and high-profile governance situations, from founder Jeff Hubbin becoming chairman of Martha Stewart's company during her imprisonment to involvement in 27 CEO successions across its portfolio.

The firm's willingness to navigate leadership crises and transitions demonstrates that its influence extends beyond financial engineering to fundamental corporate leadership and operational direction.

Source episodes

Timeline

c. 2002

In the wake of corporate scandals like Enron and WorldCom, ValueAct's engagement-focused strategy finds a favorable environment as regulations like Sarbanes-Oxley increase the focus on corporate governance.

Early 2000s

The firm gains a reputation for handling complex governance situations after investing $60 million in Martha Stewart's company, with founder Jeff Hubbin becoming chairman of the board during her imprisonment.

2013

ValueAct invests in Microsoft at a low valuation (~8x earnings) and begins an engagement that leads to the company shifting capital from money-losing hardware to strategic growth areas like Office 365 and Azure.

2017

The firm initiates a major strategic push into Japan, beginning with an investment in Olympus and eventually deploying over $7 billion in the country.

2022

ValueAct launches only its second proxy contest in its history, targeting Japanese conglomerate Seven & i Holdings, signaling a willingness to escalate tactics in its Japan-focused strategy.

2023

The firm exits its investment in CBRE after a holding period of approximately 12 years, underscoring its long-term investment philosophy.

Suggested prompts

How does ValueAct's 'quiet activism' approach compare in terms of ROI and success rate to more aggressive, public activist campaigns? &nearr;What specific aspects of Japan's corporate governance landscape make it a particularly attractive market for ValueAct's engagement strategy? &nearr;Given their acknowledged mistakes in selling winners like Microsoft too early, how might ValueAct have adjusted its exit strategy for current long-term holdings? &nearr;How does ValueAct's internal compensation structure, which rewards firm-wide performance, influence its investment selection and portfolio management decisions? &nearr;

Key concepts

Investment Strategy & Philosophy 5 ep Japan Investments 5 ep Corporate Governance 5 ep Microsoft Engagement 4 ep Track Record & History 2 ep Martha Stewart Investment 2 ep Investment Mistakes 2 ep Firm Culture & Compensation 2 ep CEO Succession 1 ep Proxy Contests 1 ep

Notable quotes

“ValueAct's founding strategy was to occupy a "white space" in public markets by adopting an owner's mentality and engaging with management, similar to venture or private equity investors.”

Mason Morfit · Mason Morfit & Rob Hale - Quiet Activism at ValueAct (EP.462)

“ValueAct's investment thesis focuses on high-quality companies suffering from "diseases of abundance," where strong cash flow enables poor decision-making and a lack of strategic focus.”

Mason Morfit · Mason Morfit & Rob Hale - Quiet Activism at ValueAct (EP.462)

“Following ValueAct's engagement, Microsoft reallocated capital from money-losing hardware initiatives to strategically important areas like Office 365 and Azure.”

Mason Morfit · Mason Morfit & Rob Hale - Quiet Activism at ValueAct (EP.462)

“ValueAct founder Jeff Hubbin became chairman of the board at Martha Stewart's company during her imprisonment, giving the firm a high-profile governance role.”

Mason Morfit · Mason Morfit & Rob Hale - Quiet Activism at ValueAct (EP.462)

Report last updated: Apr 20, 2026

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