ValueAct Loves Itself Some James Gorman

The Morgan Stanley CEO is safe in this activist hedge fund's arms.
Author:
Publish date:
(Getty Images)

Getty Images

Jeffrey Ubben may not exactly be Dan Loeb when it comes to correspondence. But, as an activist investor, it should suffice to say that the ValueAct Capital chief isn’t used to writing love letters. But when he lays eyes upon the rugged Australian visage of Morgan Stanley CEO Jim Gorman, he just can’t help himself. Nor can he figure out what the hell is wrong with everyone else, who don’t see Gorman’s genius—the record number of firings, the advisory business’ growth, the telling employees what he really thinks of them. But if the morons in the market want to give Ubben a value opportunity—one that probably won’t even run afoul of regulators.

ValueAct Capital Management’s investment in Morgan Stanley is a striking vote of confidence in the Wall Street institution—one that could signal a broader shift in investor perceptions of major banks. The $1.1 billion outlay, for around 2% of Morgan Stanley, is unusual in a few ways: ValueAct isn’t urging big changes in strategy or management. Instead, it is essentially endorsing Chief Executive James Gorman’s strategy. This fits with ValueAct’s general practice of acting as a friendly, rather than hostile, activist investor.

ValueAct Places $1.1 Billion Bet on Morgan Stanley [WSJ]
ValueAct Says ‘More Please’ at Morgan Stanley [WSJ]

Related

Confidential To The Haters: Check Back In With James Gorman About Facebook In A Year

Until then, step off, bitch. Morgan Stanley Chairman and Chief Executive James Gorman defended the securities firm's role in Facebook's tumultuous initial public offering, telling employees internally that the firm worked "100% within the rules" and calling the steep decline in Facebook's stock "disappointing." Mr. Gorman, in a weekly strategy meeting Tuesday that was later webcast to employees, said "speculation of nefarious activity" surrounding the social networking company's IPO is untrue. Contrary to some reports, he said, he wasn't "aware of any dissent" among the underwriting firms regarding Facebook's IPO price of $38 a share. The discussion, called a strategy forum, is held weekly at the firm. The event, which Mr. Gorman attends periodically, features commentary from analysts and economists and is linked to on the company's internal website. Mr. Gorman told employees to "be proud of the job your colleagues did [in the Facebook IPO process] and don't judge us based upon what happened over a couple of days." Commenting on Facebook's stock performance, Mr. Gorman acknowledged the first day of trading "matters" but added investors should also judge an IPO based on its share price after 30 days, 90 days and 12 months. Morgan Stanley Chief Defends Facebook Handling [WSJ]