By Juliet Chung and David Benoit
ValueAct Capital Management LP plans to raise up to $1.5 billion
in new funds, joining a group of activist investors who are gearing
up to target a fresh crop of companies next year.
The roughly $15 billion San Francisco hedge-fund firm, which
hasn't raised new money in several years, wants investors to agree
to keep their cash with the firm for three to five years, according
to existing and potential clients.
ValueAct could use the funds to increase the size of existing
stakes in companies, but it also has some new ideas, according to a
person familiar with the firm. Investors said ValueAct hasn't told
them what new companies it may target.
The hedge fund seeks to add long-term value to companies,
working behind the scenes with management rather than seeking to
fight publicly like many activists.
ValueAct would join Third Point LLC and Trian Fund Management LP
in seeking fresh funds. Activist investors, who typically buy
stakes in companies and agitate for strategic or financial changes,
have raised billions of dollars this year as they seek to take
advantage of their increasing clout in boardrooms. Activist funds
had more than $112 billion in assets as of the end of September, up
from $93 billion at the start of the year, according to research
firm HFR.
Founded by former Fidelity stock picker Jeffrey Ubben, ValueAct
garnered attention last year when it secured a board seat at
Microsoft Corp. despite holding less than 1% of the stock, marking
the first time the software giant appointed an activist shareholder
to its board.
ValueAct has long been active in Valeant Pharmaceuticals
International Inc., which had joined with activist William Ackman
this year in an unsuccessful hostile takeover bid for Allergan
Inc.
ValueAct's Valeant stake, a big position for the fund, has
contributed to the firm's midteen returns after fees this year
through November, according to a person familiar with the firm, as
has its Microsoft investment. Microsoft and Valeant are up 31% and
23% for the period, respectively.
In October, ValueAct disclosed it had built a 5.7% stake in
Canadian fertilizer company Agrium Inc. The company said at the
time it had been meeting with the activist and expected ValueAct to
be a long-term holder.
Write to Juliet Chung at juliet.chung@wsj.com and David Benoit
at david.benoit@wsj.com
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