market folly

Mason Morfit of activist investment firm ValueAct Capital sat down with Larry Larsen at Microsoft's Channel 9 to talk about his background, ValueAct's approach, and his thoughts on Microsoft (MSFT). 

Morfit notes that ValueAct was founded with capital from the family of the founders of The Gap.  And ValueAct wanted to think like an owner and own stocks for a long-time and develop relationships with the management and board to help the company grow.

MSFT is ValueAct's top holding and was worth over $3.4 billion at the end of 2014.  ValueAct takes an active approach with most of their investments and Morfit sits on the company's board.  Morfit says ValueAct likes to invest in some of the world's best businesses and MSFT fits that category.

"Our perspective was that lost in this negativity around what was going on in PC's and the disruptions that were coming from mobile and cloud, is that Microsoft was much more than just a Windows or PC's company." 

"I've been really happy with the progress the company's made" since ValueAct originally acquired stock in 2013.

Morfit says he's paying most attention to Office 365 (especially commercial) and subscription numbers, as well as the businesses in the servers and tools group. 

Additionally, he talked about the management transition and the company's openness to accept criticism and to openly discuss ideas and to face facts whether they're good or bad.

Microsoft was also recently pitched as a long investment by Lone Pine Capital at the Sohn Conference this week too.

Embedded below is the video of Morfit's interview:



For more on this fund, you can scroll through our past posts on ValueAct Capital here.