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.