Valueact Holdings

#### I. Institutional Overview ValueAct Capital, led by the astute and strategically minded Mason Morfit, represents a unique breed of institutional investor in the global financial landscape. As of the Q4 2025 reporting period, the firm manages a concentrated portfolio with a reported market value of approximately **$7.025 billion**. Unlike traditional hedge funds that may churn through hundreds of positions or passive index trackers that mirror the broad market, ValueAct operates with a surgical precision that is characteristic of "collaborative activism." With only **16 holdings** in its portfolio, the institution demonstrates an extreme level of conviction, where each position is not merely a financial bet but a strategic partnership or a calculated intervention in a company's corporate governance and operational trajectory. The psychological portrait of ValueAct is one of patience, deep fundamental research, and a preference for high-quality businesses that may be undergoing temporary transitions or structural undervaluations. Mason Morfit has evolved the firm’s legacy from the more confrontational activism of the early 2000s toward a model of "constructive engagement." This approach involves seeking board representation and working alongside management teams to unlock long-term shareholder value. The current portfolio scale of $7.03 billion, spread across just 16 names, results in an average position size of over **$439 million**. This high concentration ratio indicates that ValueAct is not looking for "market beta"; rather, it is seeking "idiosyncratic alpha" through concentrated bets on companies where it believes it can influence the outcome. Analyzing the scale trend, the $7.025 billion AUM reflects a robust capital base that allows ValueAct to be a significant player in mid-to-large cap companies. The firm’s investment style is inherently "Value-Oriented" but with a modern twist that embraces technology and platform-based businesses. By maintaining a lean portfolio, the institution minimizes "diworsification" and ensures that its investment team can maintain an exhaustive understanding of every line item in the portfolio. This quarter’s data reveals a firm that is actively rebalancing its core convictions, exiting legacy positions that have reached maturity or no longer fit the strategic vision, and rotating capital into massive new bets that signal a shift in macro-sector preference. The institutional "mood" captured in this 13F filing is one of **decisive reallocation**. While the number of stocks remains low, the internal movement within those 16 slots is significant. The entry of a massive new position in BlackRock (BLK) and the aggressive doubling down on Rocket Companies (RKT) suggest that ValueAct is positioning itself for a specific phase of the economic cycle—one where financial infrastructure and market-leading platforms are expected to outperform. The firm is moving away from certain "niche" technology or servicing plays and gravitating toward "backbone" institutions of the global financial and digital economy. This is the portrait of a sophisticated predator in the financial markets: patient, highly focused, and willing to move billions of dollars into a handful of ideas that it believes are mispriced by the broader market. #### II. Sector Allocation Analysis ValueAct’s sector allocation is a masterclass in concentrated macro-thematic investing. The firm does not attempt to cover the entire S&P 500; instead, it focuses on sectors where business models are scalable, cash flows are predictable (or improvable), and structural moats are present. | Sector | Weight (%) | Trend | | :--- | :--- | :--- | | Financials | 30.02 | Significant Increase | | Communication Services | 29.75 | Stable/Slight Increase | | Technology | 25.16 | Moderate Decrease | | Consumer Discretionary | 11.15 | Slight Decrease | | Materials | 3.38 | Stable | | Real Estate | 0.54 | Minimal | **2.1 Concentration and Macro Judgment** The most striking feature of ValueAct’s allocation is the **84.93% concentration** in just three sectors: Financials, Communication Services, and Technology. This is an incredibly focused layout that suggests Mason Morfit and his team have a very specific view of where value resides in the current market environment. By allocating nearly a third of the portfolio to Financials, ValueAct is signaling a strong belief in the resilience and earnings power of financial infrastructure and service providers. This is not a bet on traditional "boring" banking, but rather on high-scale financial platforms like BlackRock, Visa, and Rocket Companies. **2.2 The Shift Toward Financial Infrastructure** The rise of **Financials to 30.02%** is the headline story of this quarter. The addition of BlackRock (BLK) as a top-tier holding and the massive increase in Rocket Companies (RKT) indicate a pivot toward companies that benefit from capital market activity, asset management scale, and a potential recovery in the mortgage/housing finance sector. This suggests that ValueAct anticipates a "normalization" of the interest rate environment or a period of increased transaction volume where these "toll-bridge" financial businesses can thrive. **2.3 Communication Services: The Platform Bet** At **29.75%**, Communication Services is the second pillar of the portfolio. This sector, for ValueAct, is defined by "Platform Dominance." Positions in Meta Platforms (META), Roblox (RBLX), and Disney (DIS) represent a bet on the "attention economy" and the infrastructure of digital interaction. The firm increased its exposure to Meta and Roblox this quarter, suggesting a conviction that these platforms have successfully navigated recent headwinds (such as privacy changes or post-pandemic engagement dips) and are now entering a phase of high-margin growth driven by AI and improved monetization. **2.4 Technology: Quality Over Quantity** The **25.16% allocation to Technology** is dominated by Salesforce (CRM), which remains the firm’s largest overall holding. However, the reduction in MongoDB (MDB) and Insight Enterprises (NSIT) shows that ValueAct is becoming more selective within the tech space. They are moving away from high-growth, high-valuation "story" stocks and concentrating on established software giants with massive installed bases and clear paths to margin expansion. This reflects a "Quality Growth" mindset—seeking companies that have already won their respective categories but still have operational levers to pull. **2.5 Consumer Discretionary and Others** The **11.15% in Consumer Discretionary** is almost entirely represented by Amazon (AMZN). This position serves as a hybrid bet on e-commerce and cloud computing (AWS). The slight reduction in AMZN weight (from 12.96% to 11.15%) appears to be a tactical rebalancing rather than a loss of faith, likely used to fund the new entry into BlackRock. The remaining sectors—Materials (SSD) and Real Estate (CBRE)—are "satellite" positions that provide a small amount of diversification into industrial and commercial property cycles, but they remain secondary to the core "Financial-Comm-Tech" triad. **2.6 Macroeconomic Inference** From this allocation, we can infer that ValueAct is positioned for a "Soft Landing" or "Growth Recovery" scenario. The heavy weight in Financials and Communication Services suggests they are not hidi ---