MSCI announced it has reached a compromise agreement with San Francisco activist firm ValueAct Capital Partners. Under the deal, the company best known for its stock indices will expand its board to include three independent directors, including D. Robert Hale, a ValueAct partner. Earlier in January, ValueAct chief executive Jeffrey Ubben fired off a letter to MSCI’s board and lead director Rodolphe Vallee saying he was frustrated that no one from the San Francisco-based activist hedge fund firm had been 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,” wrote Ubben, reminding the board that his firm owned 9.3 million shares, or 8.3 percent, of the company. ValueAct has $16 billion under management.
___
William Ackman plans to invest with Philip Hilal’s Clearfield Capital Management, which is launching in the second quarter, according to the Wall Street Journal. Hilal is the younger brother of Pershing Square Capital Management partner Paul Hilal, who was also Ackman’s college roommate, according to the report. In fact, Ackman told the paper he is planning to invest the largest amount he has ever placed at another hedge fund. The investment is actually being made by Ackman, his family foundation and family members. The money will be locked-up with the new fund for five years, according to the report. “He’s a phenomenal investor and I think he’s also disciplined and organized and an excellent people person,” Ackman told the WSJ, adding that he once asked Philip Halal to join his firm as its first analyst. Hilal turned him down because he had already committed to another job. “You need to be able to run a business as well as be a talented investor to make it in this industry, and he’s got both,” Ackman told the WSJ.
___
Alexander Roepers’ Atlantic Investment Management boosted its stake in Oil States International to 3.85 million shares, or 7.2 percent of the energy services company. In regulatory filings, Roepers said that he has communicated with management and the board from time to time but so far “has no present plans or proposals.”
___
UBS Friday changed its price targets on a number of high-profile Internet stocks. It lifted its 12-month target on Amazon.com from $325 to $355 but maintained its Neutral rating, noting until now it had a “low expectation for either a revenue reacceleration or margin relief in the near-term.” UBS added that near-term margin “relief” disclosed in Thursday’s earning report “has given investors a reason to cheer Amazon.” However, UBS stressed it remains concerned about the heavy investment cycle in China, India,
media content, last-mile delivery and what it calls category expansion. On the other hand, UBS cut its price target on Yahoo, from $62 to $59. However, it noted Alibaba’s stock has fallen 9 percent over two days since Yahoo announced plans to spin off its holdings in the Chinese e-commerce giant. UBS also reduced its price target on Google, from $660 to $630 following the search engine giant’s earnings report late Thursday. Even so, it maintained its Buy rating on the stock. In a note to clients, UBS called the quarterly results “noisy,” which it asserted masks solid results. It called Google “an industry leader,” trading at multiples of forward estimates that are near their lows over the last few years “and not reflective of future growth drivers.” It added that for the stock to “shake its malaise,” it wants to see better ad-pricing trends, stable-to-improving margins and the potential for cash returns.
Barclays Friday cut its price target on Google from $650 to $620 but maintained its Overweight rating. “We continue to believe underlying core fundamentals at Google are solid,” the Swiss bank said in a client note. “That said, we understand investor frustration with the stock and are struggling a bit to see what the inflection point will be to rejuvenate the shares.”
___
Deutsche Bank raised its price target on hedge fund favorite Air Products & Chemicals from $153 to $168 after the stock jumped 6 percent following what the bank called “solid” quarterly results. At the end of the third quarter, William Ackman’s New York-based Pershing Square Capital Management was the largest shareholder, Daniel Och’s New York-based Och-Ziff Capital Management was the seventh largest shareholder and Jonathon Jacobson’s Boston-based Highfields Capital Management was the tenth-largest holder.
