The Faber Report

Jeff Ubben's ValueAct launching fund with social goals, following similar moves by Jana, BlackRock

Key Points
  • ValueAct Capital is launching a fund focused on promoting environmental and social goals for the companies it invests in, according to letter obtained by CNBC.
  • The ValueAct Spring Fund, as it will be known, is starting small with an initial target of raising $100 million.
  • Earlier this week, ValueAct made its first investment in independent power producer AES, on whose board the fund's leader Jeff Ubben will now sit.
Jeffrey Ubben
Source: BusinessWire

ValueAct Capital, the $15 billion activist firm led by Jeff Ubben, is launching a fund focused on promoting environmental and social goals for the companies it invests in.

In a letter to ValueAct's limited partners, Ubben outlines a new effort for his firm built on the premise "that there is not just a societal good to be done, but excess return to be captured in identifying and investing in businesses that are emphasizing and addressing environmental and societal problems."

Ubben declined comment on the new fund, citing SEC marketing restrictions.

The ValueAct Spring Fund, as it will be known, is starting small with an initial target of raising $100 million, according to the letter. The VAC General Partner will contribute up to $50 million toward the new fund.

In recent weeks, environmental and social investing has become a focus after activist hedge fund Jana Partners unveiled its plan for a new Impact Investing Fund. Jana made headlines with a letter imploring Apple to do a better job of helping parent's monitor their children's cellphone use.

In addition, fund giant BlackRock and its CEO Larry Fink have sent a letter to CEOs outlining his belief "To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society."

In his letter to limited partners, Ubben expounds on his belief that there is money to be made by finding companies that either have, or plan to adapt, sustainable business models that enhance financial gain. As one would expect from a long-time activist, Ubben appears to be prepared to prod them to get there, writing that he "hopes to pull forward public company actions that have near term costs as well as future stock gains."

As an example, Ubben cites a food company that invests in a supply chain with local farmers who do not engage in deforesting, an investment prospect that he believes will be rewarded in the marketplace.

Earlier this week, ValueAct made its first investment in independent power producer AES, on whose board Ubben will now sit.