| Jeffrey Ubben, ValueAct Capital (photo credit: Thomas Broening) |
Not every hedge fund manager is likely to quote biologist E.O. Wilson’s theories about human social behavior and the rewards of group altruism, let alone relate those ideas to his activities as an investor and philanthropist. But Jeffrey Ubben does.
Ubben, 53, is CEO and CIO of San Francisco-based ValueAct Capital, a value-focused firm with about $20 billion in assets. ValueAct is built on a team approach. “That way we maximize the learning across the years we worked together," Ubben says. “I get the power of the team.”
It’s fitting, then, that Ubben would get involved with an organization that also values the power of teams. He is chairman of the Posse Foundation, which he joined in 2003. The organization was founded in 1989 and now has ten chapters across the U.S. It gives select public high school students the opportunity for full scholarships for four-year degrees at partner colleges. The foundation looks for students who have academic and leadership potential and might not otherwise go to college. Students are recommended by a member of their community and then undergo a selection process. The few chosen are organized into multicultural groups of ten -- a “posse." The organization has guided 6,275 students to college (they have a 90 percent graduation rate), and it supports them through their entry into the workforce.
The idea of a posse, also called the cohort model, is the core of the foundation. The isolation that Posse’s urban students can experience once they arrive on campus -- which might be far from home -- is ameliorated by the presence of a sympathetic group. “The cohort model is powerful and works," says Ubben. “When you have that first sorority event and the Posse kids are invited, the party looks really different. Campuses start to change."
Posse’s initial student recruitment includes its Dynamic Assessment Process. When Ubben first became involved with the group (at the urging of his father, who had opened the Chicago chapter), he attended two DAP sessions and saw a connection between his business and Posse’s philosophy: Look for good companies -- or students -- and help them improve. “Posse has similar strength-based models," Ubben notes. “We work with really deserving students in the worst school districts and enable them. They’re not defined by race or socioeconomic status.”
Students are matched with one of the group’s 53 partner schools, which include Vanderbilt University, Boston University, Middlebury College and Texas A&M University. The organization focuses on schools that will provide Posse graduates with opportunities and networks; the colleges benefit from a more diverse student body. The foundation sees this as a way to change the composition of C-suites, boardrooms and political offices. “We moved to this idea that our job isn’t done just graduating these students," Ubben says. “Our job is to make sure they get on a leadership track in the workforce.”
Posse’s founder and president, Deborah Bial, says Ubben’s empathy -- and investing acumen -- have made him a driving force in the organization’s evolution. “He has such a methodical and careful strategic vision in the investment world, and that carries over really well to Posse," she says. “He’s brought incredible insights into this organization about how to make it a strong nonprofit."
With an annual budget of $20 million, most of which comes from individuals and a little corporate giving, the entire program costs about $5,000 per student, and it’s generated over $800 million in scholarship funds. There are about 4,000 students on colleges campuses or in training around the country right now. “It’s big leverage," says Ubben. “It’s a five-plus multiplier effect to spend $5,000 a student and generate a $40,000 scholarship.”
Most of Posse’s students wouldn’t have been admitted to their colleges if SAT scores had been a key metric, Ubben says. But not only do they do well academically once in college, they’re student council presidents, club founders and activists -- leaders, in other words. “We’re trying to change the definition of merit,” Ubben says.
