Large Holder Of Valeant Exited Stake Over Last Quarter -- Letter

By Sarah Krouse 

A mutual fund hurt by a large bet on Valeant Pharmaceuticals International Inc. relinquished its stake in the drugmaker over the last quarter, according to a new investor letter.

Sequoia Fund Inc. told investors in its letter Tuesday that it no longer owned any shares of Valeant, a stock that at one time accounted for more than 30% of its portfolio.

Sequoia suffered losses and client withdrawals this year as Valeant faced questions about its business and accounting practices. Sequoia was down 11.7% for the year to date through Tuesday, according to its website.

The fund also disclosed a series of new bets made during the second quarter. It bought shares in Chipotle Mexican Grill Inc., Charles Schwab Corp., Wells Fargo & Co. and CarMax Inc. Charles Schwab is known for its low-cost funds tied to indexes, and the managers of Sequoia said an industrywide shift to such funds represents an opportunity for the brokerage firm.

Cash and Treasury bills accounted for 13% of Sequoia assets at the end of June, while a longtime holding in Warren Buffett's Berkshire Hathaway Inc. represented about 17% of the fund.

Sequoia reopened to new investors earlier this year after being closed for most of its existence. The fund is available directly through its manager, though its investment committee told clients it is working with fund platforms run by Vanguard Group, Fidelity Investments and Schwab to sell to new investors.

Sequoia added that it nominated former Microsoft Corp. General Manager Peter Atkins as a new independent board member. The fund's managers said they had known Mr. Atkins, who is now managing director of investment fund Permian Partners, for several years.

(END) Dow Jones Newswires

July 12, 2016 23:39 ET (03:39 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.