Ruane, Cunniff & Goldfarb

Last updated
Ruane Cunniff LP
Company type Private company
Industry Investment Management
Founded1969 (1969)
Headquarters
New York City
Products Mutual fund, Hedge funds, Separately managed accounts
AUM $6.73 billion (7th November 2022) [1]
Number of employees
66
Website www.ruanecunniff.com/home

Ruane Cunniff LP, based in New York City, is the investment firm founded in 1969 by William J. Ruane, Richard T. Cunniff and Robert Goldfarb.

Contents

Ruane Cunniff LP is best known as the investment advisor and distributor of the Sequoia Fund (SEQUX). For a long time after its inception in 1970 the Sequoia Fund recorded one of the best long-term track records on Wall Street.

Ruane Cunniff LP manages $19 billion in assets across the Sequoia Fund, hedge fund partnerships (Acacia Partners and Wishbone Partners), and separately managed accounts. [2]

Management

After Robert Goldfarb retired David Poppe became the CEO, and the sole portfolio manager of the Sequoia Fund, until his retirement in Oct 2018. [3] After Poppe stepped down, [4] a five-person investment committee manages the Sequoia Fund. [5]

Sequoia Fund

The history of the Sequoia Fund traces its roots to Bill Ruane's lifelong friendship with Warren Buffett. Bill Ruane first met Buffett at a value investing seminar taught by Benjamin Graham at Columbia University in 1950. When Buffett closed his investment partnership in 1969, he advised his clients to invest with Ruane in the Sequoia Fund. In 1970, William J. Ruane and Richard T. Cunniff founded the Sequoia Fund to take on Buffett's former investors. [6] [7] [8] Robert Goldfarb joined the firm in 1971.

In The Superinvestors of Graham-and-Doddsville, Buffett wrote, "When I wound up the Buffett Partnership, I asked Bill Ruane if he would set up a fund to handle all of our partners, so he set up the Sequoia Fund. Bill was the only person I recommended to my partners." [9] During his search for a candidate to succeed him as chief investment officer of Berkshire Hathaway, Buffett said, "I'm looking for another Bill Ruane." [10]

In the 45-year period from its inception in 1970 to 2015, the Sequoia Fund earned an annualized return of 14.65% versus the S&P 500's annualized return of 10.93%. [11] According to Morningstar, Sequoia Fund outperformed its large-cap blend-category peers in 332 of the 333 rolling 10-year periods dating back to its 1970 start. [12] The fund closed to new investment in 1982 and reopened 26 years later in 2008. [13] In 2010, Morningstar named co-managers Robert Goldfarb and David M. Poppe Domestic-Stock Fund Managers of the Year in recognition of the excellent long-term performance of the Sequoia Fund. [14] [15] In 2013, the Sequoia Fund again closed to new investors. [16] In April 2016 and after a sharp loss on Valeant Pharmaceuticals, the Fund indicated it was reopening to new investors. [17]

In 2016, the fund lost $1.26 billion in a single day when Valeant Pharmaceuticals stock, which made up 19% of Sequoia Fund holdings, lost a significant portion of its value. [18] Goldfarb and Poppe responded by saying that their "credibility as investors has been damaged by this saga." [18] The Valeant Pharmaceuticals position accounted for over 30% of Sequoia Fund's assets in mid-2015, and declined 87% from a high of $265.52 in August 2015 to $33.43 in March 2016. [3] Over this time period Sequoia fell by 22%, performing worse than 99% of rival funds. [19] At one point, over 30 percent of the fund's assets was invested in Valeant. [20]

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References

  1. ↑ https://wallmine.com/fund/27q/ruane-cunniff-goldfarb-l-p [ bare URL ]
  2. ↑ "Ruane, Cunniff, and Goldfarb". Credio. 2015-05-13. Retrieved 2015-05-13..
  3. 1 2 "Goldfarb Exits as Sequoia's Valeant Debacle Caps 45-Year Career". Bloomberg Business. 2016-03-23. Retrieved 2016-04-22..
  4. ↑ "David Poppe to retire from Sequoia fund after 20 years". sjo3ekt.js. Retrieved 2019-02-01.
  5. ↑ "About : SEQUOIA". www.sequoiafund.com. Retrieved 2019-02-01.
  6. ↑ "Cutting Buffett Helps Sequoia Fund Top Value Investor Rankings". Bloomberg Business. 2015-05-31.
  7. ↑ "Sequoia Fund's Deep Ties To Warren Buffett Still Paying Off". Barron's. 2015-05-13. Retrieved 2015-05-13..
  8. ↑ "For Sequoia, Life After Warren Buffett Is Sweet". Bloomberg Business. 2015-05-13. Retrieved 2015-05-13..
  9. ↑ "The Superinvestors of Graham-and-Doddsville" (PDF). Columbia Business School. 2015-05-13. Retrieved 2015-05-13..
  10. ↑ "Want to Be Next Warren Buffett? The Line Forms in Nebraska". Wall Street Journal. 2015-05-13. Retrieved 2015-05-13..
  11. ↑ "Sequoia Fund Inc. Investment Return Table". sequoiafund.com. 2013-09-30. Retrieved 2013-10-28..
  12. ↑ "Legendary Sequoia Fund opens its doors to new investors". Seattle Times. 2015-05-13. Retrieved 2015-05-13..
  13. ↑ "Storied Sequoia Fund to reopen, but has the glory gone?"..
  14. ↑ "2010 Morningstar Press release"..
  15. ↑ "Morningstar names top fund managers for 2010". Reuters. 5 January 2011. Archived from the original on March 5, 2016..
  16. ↑ "Sequoia Fund Letter to Shareholders" (PDF). Archived from the original (PDF) on 2014-01-01..
  17. ↑ "Buffett, Munger slam Valeant; drugmaker turned into 'a sewer'".
  18. 1 2 "Valeant Costs Hedge Funds $3 Billion as Ackman, Paulson Hit". Bloomberg Business. March 15, 2016. Mutual fund manager Ruane Cunniff & Goldfarb, manager of the Sequoia Fund and the company's biggest holder of Valeant shares, lost $1.26 billion on the investment ... trailed 97 percent of peers over the last year because of Valeant. The shares accounted for 19 percent of the fund as of Dec. 31. "As the largest shareholder of Valeant, our own credibility as investors has been damaged by this saga," the fund's co-managers Robert Goldfarb and David Poppe wrote
  19. ↑ "How Sequoia Fund's Valeant Mistake Upended a Top Performance". Bloomberg Business. 2016-04-20. Retrieved 2016-04-22..
  20. ↑ Stein, Charles (20 Apr 2016). "How Sequoia Fund's Valeant Mistake Upended a Top Performance". Bloomberg. Retrieved 21 May 2016.
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