ValueAct Capital is a value fund founded and managed by Jeffrey Ubben that makes large investments in a relatively small number of companies that it believes are deeply undervalued. It usually only makes a few new investments per year and tends to hold investment for about three years. ValueAct was founded in 2000 to manage capital for founders and a select group of investors but has grown steadily since then. It now has $11.1 billion invested in 14 stocks, up from $7 billion last year and $9.7 billion last quarter.

ValueAct

ValueAct’s new positions: ALSN, MOS, VLO

ValueAct opened a position on Allison Transmission Holdings Inc (NYSE:ALSN) with 4.6 million shares, Mosaic Co (NYSE:MOS) with 576,000 shares, and Valero Energy Corporation (NYSE:VLO) with 638,000 shares. ALSN accounts for about 1% of ValueAct’s total portfolio while Mosaic and Valero are both less than 1%. For a company that normally makes deep investments in its best ideas, all three of these new positions look like they are just testing the waters.

ValueAct increased its largest holding, Microsoft Corporation (NASDAQ:MSFT) by 16% to 66.9 million shares. It also increased Rockwell Collins, Inc. (NYSE:COL) by 17.29% to 13 million shares, Msci Inc (NYSE:MSCI) by 19.25% to 7 million shares, and CF Industries Holdings, Inc. (NYSE:CF) by 41.22% to 1.4 million shares.

No positions reduced or sold

It seems that Ubben was pretty happy with his fund’s performance this quarter because he didn’t he reduce or sell of any of his positions, and the basic composition of the portfolio was unchanged. Microsoft Corporation (NASDAQ:MSFT) remained the largest position and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) surpassed Motorola Solutions Inc (NYSE:MSI) with 17.8% of the portfolio versus 15.5%, but this was because of changes to the two companies’ stock prices. ValueAct didn’t buy or sell shares in either company and still has 19 million shares of Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and 29 million shares of Motorola Solutions Inc (NYSE:MSI). Its fourth-largest position is Adobe Systems Incorporated (NASDAQ:ADBE) with 31 million shares followed by Rockwell Collins, Inc. (NYSE:COL).

ValueAct’s stocks breakdown as 38% IT stocks (dominated by the large position in Microsoft Corporation (NASDAQ:MSFT) of course), 18% health care stocks, 17% financials, 15% technology stocks, 8% industrials and 3% materials. In addition to the stocks mentioned above it has maintained its positions in Willis Group Holdings PLC (NYSE:WSH) (18 million shares), MICROS Systems, Inc. (NASDAQ:MCRS) (6.7 million shares), and KAR Auction Services Inc (NYSE:KAR) (800,000 shares).