Sequoia Fund Sued
From Reuters (http://www.reuters.com/article/us-sequoia-valeant…):
The investment firm that runs the Sequoia Fund, long known for its ties to Warren Buffett, was sued by shareholders who claim it recklessly took a huge stake in embattled drug company Valeant Pharmaceuticals International Inc (VRX.TO), causing more than $2 billion in losses.
Investment firm Ruane, Cunniff & Goldfarb; portfolio managers Robert Goldfarb and David Poppe; and two directors were accused of gross negligence for letting Sequoia amass a Valeant stake that peaked at 32 percent of its portfolio in August.
According to the complaint filed on Friday in a New York state court in Manhattan, this violated Sequoia's policy of not investing more than 25 percent of assets in one industry.
Opinions?
Sounds like shareholders are pissed the Sequoia fund lost a ton of dough and trying to find a way to recoup their losses
I think it should be pretty easy to confirm whether the fund did anything criminal from a legal point of view in terms of the size of their Valeant stake
Whether or not that is in the spirit of their investment philosophy is another story
+1
Should be straight forward. Position has always been big... people should be pissed at themselves for not realizing it sooner. Market is the best place to "vote with your feet"
Shareholders would have asked Sequoia to make more of those investments if Valeant had made them money.
In any case, it is poor risk management to have 32% of aum in a single stock.
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