Sequoia Fund Reopens to New Investors After Plunge in Assets

  • Valeant stock dive hurt results, reputation at storied fund
  • Sequoia will remain closed to those buying via third parties

Sequoia Fund, the Valeant Pharmaceuticals International Inc. holder whose assets fell as slumping performance led to outflows, is reopening to new investors.

The $5.3 billion mutual fund will accept direct purchases from new customers but remains closed to those seeking to buy through intermediaries, according to a regulatory filing Friday. Manager David Poppe told shareholders in an April 19 letter that the fund was considering such a move.

“We’ve had a number of requests from investors who would like to get into the fund at these levels,” he wrote at the time.

Valeant’s decline of more than 80 percent over the past year has hurt the results of a fund that built a reputation for stellar stock picking. Sequoia lost 23 percent over the past year and 10 percent this year as of April 28, trailing more than 99 percent of peers over both periods. The fund, started in 1970 by a friend of Warren Buffett, had returned 14 percent a year from inception through the end of 2015, compared with 11 percent for the Standard & Poor’s 500 Index.

Sequoia, which at one point had more than 30 percent of its assets in Valeant, had 19 percent of its money in the drug stock as of Dec. 31. Investors pulled more than $1 billion from the fund in the four months ended March 31, Bloomberg estimates.

A message to Sequoia seeking further comment wasn’t immediately returned.

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