Sequoia Fund Managers Suffer $1.2 Billion Loss as Valeant Falls

  • Drugmaker plunges as U.S. Congress asks for price data
  • Valeant represents almost 30 percent of Sequoia's assets

Ruane Cunniff & Goldfarb, managers of the $7.8 billion Sequoia Fund, suffered a paper loss of about $1.2 billion after shares of Valeant Pharmaceuticals plunged. 

The drug maker fell as much as 20 percent after Democrats in the U.S. House asked to subpoena the company for documents relating to drug price increases, the latest move by politicians seeking to curb prices on acquired drugs.

Ruane Cunniff, Valeant’s largest owner, held 33.9 million shares of the drug company as of June 30, according to data compiled by Bloomberg. Valeant fell $35.79, or 18 percent, in New York trading at 2:23 pm, which translates to a loss for the money manager of $1.21 billion. The calculation assumes the money manager has not added or sold shares.

The Sequoia Fund was co-founded in 1970 by Richard Cunniff and William Ruane, a friend of Warren Buffett’s from the days the two studied together under the legendary value investor Benjamin Graham at Columbia University. Cunniff and Ruane are deceased.

Valeant represented 29 percent of the fund’s holdings as of June 30, according to data compiled by Bloomberg. The fund outperformed 99 percent of rivals this year and 97 percent over the past five years.

Valeant shares, including reinvested dividends, have climbed almost seven-fold over the past five years.

A call to Ruane Cunniff was not immediately returned.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE