ValueAct’s $15 billion portfolio includes a range of investments, including billions in companies like Citigroup, the private equity firm KKR & Co. and Seagate Technology, a data management company. But the Reuters interview focused on a corner of ValueAct’s empire, a $1 billion fund that focuses on green companies, including Hawaiian Electric.
HEI Hawaiian Electric Building, June 2016.
Cory Lum/Civil Beat
The Hawaii utility is working to wean itself from fossil fuels by 2045 to comply with a state law. ValueAct owns a $75 million stake in the utility’s parent company and has been highly critical of the company’s efforts so far. Ubben, for example, has said Hawaiian Electric has done such a bad job transitioning from fossil fuel that an outsider should succeed the parent company’s chief executive, Constance Lau, when she steps down.
On Tuesday, Ubben said the idea behind investing in “keystone” companies like Hawaiian Electric, was in part to help “make them success stories and have The Wall Street Journal write about them.”
ValueAct controls a mere 1.5% of the company’s stock but seems poised to effect an outsized influence on the company. Ubben noted that just three large institutional investors — BlackRock Inc., Vanguard Group and State Street Global Advisors — control almost 25 percent of Hawaiian Electric shares.
At the very least, ValueAct seems to have an ideological ally in BlackRock, the $7 trillion asset manager which owns more than 9% of Hawaiian Electric shares. Earlier on Tuesday, in a letter to chief executives, BlackRock’s chief executive, Larry Fink, said the firm will view environmental and social sustainability as a “new standard for investing.”
Fink’s comments weren’t lost on Cox, who said to Ubben, “I assume this is grease on the wheels” to push the changes Ubben wants at Hawaiian Electric.
“It’s pretty exciting,” Ubben agreed.
“If I can turn that vote around on environmental and social metrics that create a more long-term sustainable company,” he added, “this can happen fast.”
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