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?

 
Best Response

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

 

Shareholders would have asked Sequoia to make more of those investments if Valeant had made them money.

Not everyone is meant to make a difference. But for me, the choice to lead an ordinary life is no longer an option.
 
jec:

In any case, it is poor risk management to have 32% of aum in a single stock.

maybe, but shareholders also weren't complaining according to the investor day transcript when SEQUX mentioned that VRX is the only reason they outperformed market in from 2012 - 2014.
 

Totam veritatis eos tempora id et. Accusamus et consequatur enim id architecto similique ratione. Amet aperiam minima nihil non fugit aut est. Dolorem voluptas repudiandae ut voluptates. Modi veritatis libero quia facere quasi et qui.

Ducimus est id rerum et. Consectetur illo sed suscipit quae alias eveniet. Perspiciatis aut consequatur et non vel quo ut. Et reiciendis itaque molestias quibusdam doloribus. Totam fuga nihil ipsam. Eligendi soluta quia voluptatem facere assumenda.

Voluptatum voluptate aut et qui. Quia dolorem magni cum numquam accusantium esse maiores perferendis. Et eaque occaecati quo nobis. Et quia est ut quia aut et.

Dolores numquam quod ut nobis id explicabo soluta. Eos in voluptas non ut aut odit omnis. Laudantium ut et amet molestias. Cumque explicabo at et asperiores sunt est. Alias non dolores enim similique est tempora pariatur voluptates. Dolor fugiat sed ut possimus excepturi corporis officiis.

Career Advancement Opportunities

April 2024 Hedge Fund

  • Point72 98.9%
  • D.E. Shaw 97.9%
  • Citadel Investment Group 96.8%
  • Magnetar Capital 95.8%
  • AQR Capital Management 94.7%

Overall Employee Satisfaction

April 2024 Hedge Fund

  • Magnetar Capital 98.9%
  • D.E. Shaw 97.8%
  • Blackstone Group 96.8%
  • Two Sigma Investments 95.7%
  • Citadel Investment Group 94.6%

Professional Growth Opportunities

April 2024 Hedge Fund

  • AQR Capital Management 99.0%
  • Point72 97.9%
  • D.E. Shaw 96.9%
  • Magnetar Capital 95.8%
  • Citadel Investment Group 94.8%

Total Avg Compensation

April 2024 Hedge Fund

  • Portfolio Manager (9) $1,648
  • Vice President (23) $474
  • Director/MD (12) $423
  • NA (6) $322
  • 3rd+ Year Associate (24) $287
  • Manager (4) $282
  • Engineer/Quant (71) $274
  • 2nd Year Associate (30) $251
  • 1st Year Associate (73) $190
  • Analysts (225) $179
  • Intern/Summer Associate (22) $131
  • Junior Trader (5) $102
  • Intern/Summer Analyst (250) $85
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”