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Tuesday, April 12, 2016|
Sequoia Redeems In Kind
The folks at Ruane, Cunniff & Goldfarb [profile] are handling a big flood of outflows by making in-kind redemptions. The reaction is more reminiscent of "the kindly ones", the ironically nicknamed Furies from Greek mythology.
Sequoia and RCF are under fire thanks to being hit hard by the big drop in shares of drug company Valeant, a big Sequoia holding. Per Morningstar, the $5.5-billion fund suffered more than $500 million in outflows in Q1.
Barron's also picked up on the in-kind redemption story, while Bloomberg highlighted how much of Valeant (4 million shares, 11 percent of Sequoia's stake) that Sequoia sold in Q1.
The WSJ cites Dechert partner Jeffrey Sion as calling the in-kind redemptions "a perfectly legitimate strategy." Though "the move has come as a surprise to some investors and their advisers," the paper says, the in-kind redemption option is "part of a longstanding fund policy" for those who redeem at least $250,000.
Printed from: MFWire.com/story.asp?s=53805
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