May 4, 2017

Why ValueAct bought into KKR

Jeff Ubben, the CEO of activist investor ValueAct Capital, spoke briefly with Axios about his firm's acquisition of a 5% stake in private equity giant KKR & Co. Two notes:

Investment thesis: Ubben believes that KKR stock is undervalued, so either the markets begin to get it "right" or KKR management will eventually choose to convert the structure (perhaps a take-private?). Either way, ValueAct would get paid.

Differentiator: So why KKR, given that stock price undervaluing could also be an argument for buying into, say, Apollo? The answer is KKR's outsized balance sheet, which Ubben sees as a flexibility boon whereas many other managers view it as a burden. For context, S&P Capital IQ shows that KKR's total balance sheet assets were around $39 billion at the end of 2016. Blackstone was $26 billion, Carlyle was around $10 billion and Apollo was $5.6 billion.

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The rematch of the century

Illustration: Eniola Odetunde/Axios

The weekend's biggest sporting event is Wilder-Fury II, which despite its name is not an action movie sequel starring Jean-Claude Van Damme but, rather, a boxing match starring arguably the two best heavyweights in the world.

The backdrop: In their first meeting in December 2018, Deontay Wilder and Tyson Fury put on a memorable show at Staples Center, with Fury surviving a brutal right hand in the 12th round to earn a split-decision draw.

Go deeperArrow11 mins ago - Sports

Pro-Trump warrior takes the helm of U.S. intelligence

Richard Grenell in Berlin. Photo: Sean Gallup/Getty Images

By picking Ambassador Richard Grenell to be acting director of national intelligence, President Trump has slotted a pro-Trump warrior into the ultimate apolitical role.

What they're saying: James Clapper, the longest-serving DNI (2010-2017), tells Axios it's "very worrisome installing a partisan with no real intelligence experience in this position."

Coronavirus kills 2 Diamond Princess passengers as Israel confirms first case

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. U.S. numbers include Americans extracted from Princess Cruise ship.

Two elderly Diamond Princess passengers have been killed by the novel coronavirus — the first deaths confirmed among the more than 600 infected aboard the cruise ship — as Israel confirmed its first case among evacuees from the ship.

The big picture: COVID-19 has now killed more than 2,200 people and infected over 76,000 others, mostly in mainland China, where the National Health Commission announced 118 new deaths since Thursday.

Go deeperArrowUpdated 1 hour ago - Health