ValueAct exits Morgan Stanley stake, trims other financial firms in Q1-filing By Reuters

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© Reuters. FILE PHOTO: A Wall St. street sign is seen near the New York Stock Exchange (NYSE) in New York City, U.S., March 7, 2019. REUTERS/Brendan McDermid


By Svea Herbst-Bayliss

BOSTON (Reuters) – Investment firm ValueAct liquidated its stake in Morgan Stanley (NYSE:) and trimmed holdings in Citigroup Inc (NYSE:), KKR & Co (NYSE:) Inc and SLM (NASDAQ:) Corp in early 2021, pointing to a shift away from some financial firms that it has owned for several years, a regulatory filing released on Monday showed.

ValueAct sold 8.2 million shares of U.S. bank Morgan Stanley stock during the first quarter, exiting the remainder of an investment it first told clients about in 2016. At that time ValueAct said it owned 38 million shares worth $1.1 billion.

At that time Morgan Stanley’s stock traded around $30.55. At the end of the first quarter 2021 it was at $77.66.

ValueAct in 2017 announced an investment in KKR. Mason Morfit, who is now ValueAct’s chief executive officer and chief investment officer, said then that the stock price could climb to $37 a share.

ValueAct cut its KKR holding by 16% during the first quarter, selling 6.4 million shares, the filing showed. The firm owned 31.6 million shares at the end of the quarter, and KKR’s stock price closed at $55.44 on Monday.

The San Francisco-based investment firm also trimmed its holding in Citigroup, an investment it announced in late 2017. It cut its stake by 19% to 21.7 million shares at the end of the first quarter. Earlier this year, Jane Fraser succeeded Michael Corbat as Citi’s CEO.

The firm cut its holding in SLM Corp, which it has owned since early 2018, by 18%, when it sold 6 million shares to own 26.3 million shares on March 31.

The so-called 13F filings show the U.S. stock holdings of investment managers at the end of certain period. While the disclosures are backward looking, they are closely watched for clues about investment trends and what activist hedge funds might be planning next.

While ValueAct is considered an activist fund, it rarely makes public demands and prefers to make suggestions behind the scenes, often without having a board seat.

It took new stakes in Insight Enterprises (NASDAQ:), TopBuild (NYSE:) Corp and OUTFRONT Media during the first quarter, the filing shows.

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