ValueAct's Jeff Ubben, one of the most-respected activist hedge fund managers out there, is returning capital to his investors because he is concerned about the stock market's high valuation.
"The broader market context is explicit to us. The S&P 500's median P/E ratio is 18 times. For most
The hedge fund will return $1.25 billion in capital to its limited partners starting on May 1. Ubben cited the higher-than-normal cash balances in the fund ranging from 10 percent to 29 percent since the end of 2015 versus the 5 percent average during the last decade.
"Over the remainder of 2017, we anticipate we will make more significant, partial sales of core positions and receive a $500 million dividend from Baker Hughes Incorporated upon the closing of its merger with General Electric's oil and gas division. Combined, these actions should adequately fund new investments, given the current market environment," he added.