‘Elizabeth Warren is right’: Activist investor Jeff Ubben quits his $16 billion hedge fund to launch an ESG firm, citing companies that ‘aren’t working for society or nature’

• Jeff Ubben is leaving $16 billion hedge fund ValueAct Capital to start a new fund focused on environmentally and socially responsible investing, The Financial Times reported Tuesday.
• The activist investor hopes to use the fund — named Inclusive Capital Partners — to "prove that there's a return" in impact investing.
• "Finance is, like, done. Everybody's bought everybody else with low-cost debt," Ubben said. "Every industry has about three players. Elizabeth Warren is right."
• The move follows a yearslong transition for Ubben from leading ValueAct to transferring his power to successors.
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Jeff Ubben is moving on from ValueAct Capital to a decidedly greener venture, The Financial Times reported Tuesday.

The activist investor plans to create a new hedge fund focused on environmentally and socially responsible investing. The fund — named Inclusive Capital Partners — will be launched in partnership with Lynn Forester de Rothschild, CEO of the Coalition for Inclusive Capitalism, according to the Times. Ubben hopes to employ the strategy he used with ValueAct's primary fund and focus on implementing strategy changes at specific companies.

"Companies, as governed today, with investors asking for more current returns and more buybacks and so forth, aren't working for society or nature," he told the Times. "But I have to prove that there's a return, because otherwise ... you're not really changing anything."

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Using ValueAct for responsible investing and hedge strategies confused investors, Ubben added. Clients interested in ESG factors feared they were missing out on profits, while those piling into the firm's hedge fund worried about being labeled ignorant to environmental and social issues, according to the Times.

Many of the opportunities in traditional investing are drying up and creating a greater incentive for impact strategies, Ubben said.

"Finance is, like, done. Everybody's bought everybody else with low-cost debt. Everybody's maximized their margin," he said. "They've bought all their shares back ... There's nothing there. Every industry has about three players. Elizabeth Warren is right."

The move comes after a drawn-out transfer of power from Ubben to others at the $16 billion hedge fund. The investor passed on the role of chief investment officer in 2017 and relinquished the CEO title last year to his successor.

Ubben will still manage a $1 billion impact fund at ValueAct during the transition. Still, the firm's founder is confident it's time for the business to continue without him at the helm.

"ValueAct needs to not be 'Jeff Ubben's ValueAct' any more," Ubben said. "I haven't put a stock in the main fund in three years ... That's a problem for ValueAct, since they should be able to move on from me."

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