Jeff Ubben of ValueAct Capital is the second of three prominent activists speaking back to back to back today. Ubben’s presentation is called “Attracted to Global Risk”. Jeff is speaking live from the 9th Annual Value Investing Congress.
Jeff Ubben is a Founder, CEO and CIO of ValueAct Capital. Prior to founding ValueAct Capital in 2000, Ubben was a Managing Partner at Blum Capital Partners for over five years. Ubben is a director of Willis Group Holdings, a former chairman and director of Martha Stewart Living, a former director of Acxiom, Catalina Marketing, and many other public and private companies.
Jeff has recently been in the news after Microsoft Corporation (NASDAQ:MSFT) granted his request to get a chair on the board. Ubben holds a massive stake in the tech giant, and readers can find our exclusive coverage from a recent shareholder letter, which discusses the purchase of Microsoft shares. It is likely that Ubben is legally barred from discussing MSFT, but he almost certainly has other interesting topics to discuss.
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Jeff Ubben live coverage
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Updated the crowd on his 2 picks last year. Moody’s Corporation (NYSE:MCO) and CB Ellis. He sold Moody’s since last year, but still holds CBRE Group Inc (NYSE:CBG)
Has another pick coming up. I HOPE it is not Microsoft Corporation (NASDAQ:MSFT), I might walk out!
He is pitching Willis Group Holdings PLC (NYSE:WSH) –Insurance brokerage
Reasons the stock has been weak: 5 years of flat earnings, tough pricing environment, pension issues and large acquisitions at a challenging time.
Today: Better pricing, new CEO, accelerating cash flow and all segments now performing well
Expected mid teens annual returns in the medium term
A high quality business with high client retention rates
International business has been strong, while the US business has struggled —which is why they were able to buy at a good price. They think the US business is turning and will see growth from it soon
ValueAct sees an opportunity to cross sell
Willis Group Holdings PLC (NYSE:WSH) owns 17% market share of the global reinsurance broker market –top 3 player with 80% of market….high barriers to entry
(2:12pm EST) ValueAct typically looks for the #2 or #3 company in industries, as the leaders typically have to defend high margins and high multiple
Free Cash flow is accelerating
*12% earnings growth + 3% Dividend Yield= 15% Return without multiple expansion*
Pension is overstated
Will leave 15 minutes for questions, but cannot talk about Microsoft Corporation (NASDAQ:MSFT) as they have “things going on”…..not sure what that means and he said he would not elaborate!