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ValueAct reveals bet on Strayer Education due to its A.I. investments

ValueAct CEO Jeffrey Ubben expects Strayer Education to thrive because of its technology capabilities.

Strayer “delivers good student outcomes … Strayer has been taking their tuition down to make it more affordable. That’s the big problem in education, affordability,” he said on CNBC’s “Closing Bell” Friday in an interview with Kelly Evans. “And they’ve been investing in artificial intelligence.”

Ubben said students are having a “better experience” due to the education company’s technology improvements. He confirmed ValueAct’s new sustainability-focused fund bought a position in Strayer Education’s stock. The company was not on the firm’s last 13F regulatory holdings filing.

Ubben sees a big growth market for Strayer in its enterprise business.

“The idea is …. to use technology to keep tuition [low enough] to the point it could be a corporate benefit and pretty soon we’re educating the masses in a sense on the corporate tab,” he said.

On another matter, Ubben acknowledged that one of the reasons Twenty-First Century Fox agreed to sell assets to Disney was competition from Amazon. ValueAct Capital on Friday announced that Ubben has stepped down from the board of directors of Twenty-First Century Fox.

“Love the Disney deal … The work from here is pretty much regulatory work. To a certain extent I feel my job is done,” he said. “When you look at Amazon and how they do Prime. None of us really expected that they would give away video … So my view on this is that you need the Disney fly wheel. You need the content to drive to [Disney] parks, that drives the retail.”

He also shared his views on the recent controversy over the social media business:

“I think the ad driven model where you centralized the internet on a single platform where the dopamine you can generate distributing polarized messages to sell more ads because you stay online longer is just a disaster.”

Ubben is founder and chief executive officer of ValueAct Capital. Previously, the hedge fund manager was a managing partner at Blum Capital Partners and a portfolio manager at Fidelity Investments. The firm has more than $15 billion of assets under management, according to its website.

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