The Morning Brief: ValueAct Puts Pressure on MSCI

ValueAct Capital Partners chief executive Jeffrey Ubben fired off a letter to the board of directors of MSCI and lead director Rodolphe Vallee, saying he is frustrated that no one from the San Francisco-based activist hedge fund firm was named to the board.

“We first asked to join the MSCI board this past August due to our significant and unanswered questions of strategy and organization,” states Ubben, reminding the board that his firm owns 9.3 million shares, or 8.3 percent, of the company best known for its various financial market indices. “We have shared with you our investment philosophy: identify high-quality businesses and develop a deep understanding of them, invest long-term, and pursue board representation if we feel there is a role to play as a shareholder-director,” Ubben states in the letter.

Reminding the board that the company’s stock performance ranks “at the bottom” of its peers, Ubben urges the board to “engage directly, without management or advisors,” with its larger shareholders to “gain their perspectives on management’s performance and on their interest in a major change in the governance of the company.”

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Reinsurance firm Swiss Re is looking to unload its 15 percent stake in London-based Brevan Howard Asset Management, according to the Wall Street Journal. A source tells the paper that Swiss Re made a profit on its initial investment in the firm, having bought its stake in 2007, when Brevan Howard managed $12.5 billion. The hedge fund firm now manages some $30 billion, according to the report. However, Brevan Howard has struggled with performance of late. It just posted its first-ever losing year in its flagship Brevan Howard Master Fund, having lost a slight 0.8 percent in 2014, and it has shuttered some smaller funds over the past year. The flagship fund’s annualized return since its inception in 2003 is approximately 10 percent, compared with 5.7 percent for other macro funds over the same period, according to the report.
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Tiger Global Management’s venture capital arm was one of several firms to participate in Glassdoor’s latest $70 million Series G financing. This is at least the second investment in the Mill Valley, California-based online jobs company that New York-based Tiger Global has made.

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The Fire & Police Pension Association of Colorado discussed at its October 30 monthly board meeting a full redemption of its $41 million investment in Coatue Qualified Partners, the long/short equity fund headed by Philippe Laffont’s New York-based Coatue Management. It is not apparent whether it did in fact unload the position. The pension fund did not return phone calls.

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Shares of Micron Technology fell nearly 2 percent in after hours trading Tuesday after the semiconductor company beat Wall Street consensus earnings estimates but came in shy of revenue forecasts. Micron has been a long-time favorite of David Einhorn’s New York-based Greenlight Capital, which counted the company as its largest holding at the end of the third quarter at 15 percent of its U.S. long equity portfolio. Greenlight was also Micron’s seventh largest shareholder. Seth Klarman’s Boston-based Baupost Group was the second largest shareholder, with 4.81 percent of the shares.

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