Hedge fund ValueAct Capital gained 39% in 2023 -investor

By Svea Herbst-Bayliss

NEW YORK (Reuters) – ValueAct Capital, which has pushed for changes at companies ranging from Salesforce to Microsoft, returned 39% last year, an investor familiar with the numbers said on Wednesday.

The returns, among the best for activist investors, were fueled by successful bets on business software maker Salesforce, investment company KKR and technology company Insight Enterprises.

2023 was generally a strong year for corporate agitators, with the average activist fund returning roughly 20%, according to Hedge Fund Research (HFR).

The year marked a recovery from 2022 when markets tumbled and activists, who often bet that stocks will climb, lost an average 16%, HFR data shows. In 2022, ValueAct’s flagship fund fell 22%, a person familiar with the returns said.

A ValueAct spokesman had no comment on returns.

The San Francisco-based firm, which oversees roughly $10 billion in assets and was founded in 2000, is known for working with targets out of the limelight and is often invited onto the board to give advice.

ValueAct’s chief investment officer, Mason Morfit, joined Salesforce’s board in early 2023 and the company’s stock nearly doubled last year. Early this year, Walt Disney, facing pressure from two activists seeking board seats, entered into an agreement with ValueAct where the firm will consult with the entertainment giant and support the company’s directors.

ValueAct fought a proxy fight in Japan in 2023 when it unsuccessfully tried to replace four directors at Seven & i Holdings after having urged the company to spin off its 7-Eleven convenience store chain.

ValueAct’s Japan fund, co-managed by Morfit and Rob Hale, gained roughly 32% last year after having been launched in late 2022, the investor said.

(Reporting by Svea Herbst-Bayliss in New York; Editing by Matthew Lewis)