<p>ValueAct Capital has sold a quarter of its position in <a href="http://www.forbes.com/companies/microsoft" ng-href="http://www.forbes.com/companies/microsoft" target="_self">Microsoft</a> <a href="http://www.forbes.com/companies/microsoft" ng-href="http://www.forbes.com/companies/microsoft" target="_self">MSFT -1.92%</a> as the Jeff Ubben-run activist hedge fund tries to keep the software giant a manageable piece of its overall portfolio. The stock sale, however, comes as ValueAct president Mason Morfit seeks re-election to Microsoft’s board of directors at the company’s annual meeting on Dec. 1 and amid turmoil in some of the star fund’s holdings.</p>
<p>On Thursday evening ValueAct said in a filing it had sold 18.65 million Microsoft shares worth just under $1 billion in an effort to pare the holding to 20% of its overall portfolio. Those stock sales come amid a recent surge in Microsoft’s share price after reporting far better-than-expected third quarter earnings, marked by continued progress in the company’s cloud computing and software licensing push under CEO <a href="http://www.forbes.com/profile/satya-nadella/" target="_self">Satya Nadella</a>. Microsoft shares have gained roughly 21% this quarter.</p>
<p>“Due in part to the performance of the Microsoft’s stock in the fourth quarter, our position in the Company has exceeded 20% of our overall portfolio. We have sold 18.65 million shares over the past few days for portfolio management purposes,” ValueAct said of its Microsoft stock sale.</p>
<p>While Microsoft’s gains have increased its weight in the ValueAct portfolio, another factor at play is the steep decline in some of the fund’s other holdings.</p>
<p>Most notably, ValueAct’s holding of <a href="http://www.forbes.com/companies/valeant-pharmaceuticals" ng-href="http://www.forbes.com/companies/valeant-pharmaceuticals" target="_self">Valeant Pharmaceuticals</a> shares has plunged over 70% over the past three months amid a litany of scrutiny into the specialty drugmaker’s business practices. At the end of June, Valeant was the biggest position in ValueAct’s portfolio by market value at over $4 billion, however those shares are now worth just $1.2 billion as of the end of trading Thursday.</p>
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