Business is booming.

Sequoia’s stealthy wealth management fund shakes up its portfolio

67


Sequoia Capital, one of Silicon Valley’s largest venture firms, has quietly built a $14bn fund to invest the wealth of its partners and start-up founders. Now the fund’s managers are offloading some of the high-flying tech companies that have made Sequoia wealthy.

Sequoia Heritage, started in 2010 with money from the venture firm’s partners, has ploughed the proceeds of the sales into new investments such as air filtration providers and opioid treatment clinics.

The trades, largely made in the past year-and-a-half, have nudged Heritage more into the spotlight after more than a decade in the shadow of Sequoia’s venture capital funds, which made early investments in the likes of Apple, Google, Nvidia, Instagram and WhatsApp.

Heritage dumped its entire holding of more than 500,000 shares in the travel company Airbnb in the second quarter, and it has sold more than half of its stake in the game development company Unity since the company went public, according to filings. Both companies are also big winners for Sequoia’s venture funds.

At the same time, Heritage has moved deeper into private investments, such as the industrial holding company Madison Industries and an unnamed opioid treatment business backed by the private equity firm Shore Capital Partners.

Speaking publicly about the fund for the first time, Heritage’s head investors, Keith Johnson, 46, and Kevin Kelly, 31, told the Financial Times it aimed to triple investor capital over a decade. Johnson said it has beaten that target.

“The next, best investment has to be better than everything else we already own and better than everything else we’re seeing,” Kelly said.

Heritage, which shares a building with Sequoia Capital and operates as a separate legal entity, made net returns of more than 73 per cent in the 12 months through to June this year, said one person briefed on the numbers.

Some of the gains have come from early bets on new fund managers, including the former star T Rowe Price stock picker Henry Ellenbogen’s Durable Capital Partners, according to people familiar with the investments.

But Heritage has increasingly profited from direct investments that do not come from external managers.

One example is Veterinary Emergency Group, a private company that Heritage first backed when it had just two clinics in 2017. Investors recently valued the company at $1.5bn following a $100m financing.

The growth of Heritage has produced lucrative returns for Sequoia’s partners and their foundations, the biggest investors in the fund. It has also created a large pool of steady, fee-charging assets that could prove key to the future of Sequoia’s sprawling collection of interrelated businesses.

Some of Sequoia’s rivals, including Andreessen Horowitz, have held early conversations about creating similar funds, according to people familiar with the discussions. Andreessen has declined to comment on its plans.

Unlike similar wealth management funds, such as the McKinsey affiliate MIO Partners, Heritage also manages money for third-party investors — a decision that has allowed it to grow into a profitable standalone business.

Heritage began in 2010 with about $250m from outside investors and $150m each from Sequoia partners Michael Moritz and Doug Leone. Moritz viewed the fund as a vehicle for people in “Sequoia and the Sequoia circle” to manage their money while avoiding Wall Street wealth management firms, he said in an interview.

Heritage is structured as an open-ended fund, meaning it does not need to return money to investors by a certain date. The fund charges a flat fee for the assets it manages and does not add extra fees on performance gains, according to people familiar with the structure.

The fund had recently submitted a proposal allowing investors to pay reduced management fees in exchange for an additional performance fee, the people said.

Heritage’s co-heads said they did not aim to allocate assets evenly between different sectors. Instead, they would evaluate each new investment independently, aiming to find the highest returning assets.

“The world has come to believe assets in 2021 are worth what we thought they would have been worth in 2025 if the company performed flawlessly,” Kelly said.

Kelly said Heritage had looked to sell highly valued holdings at “2025 prices” and move the proceeds into areas where the firm was “leaning into the wind a little bit”.

Larry Gies, founder of Madison, said the company had grown “four-and-a-half fold” since Heritage first invested in 2020.

Heritage has invested more capital as the company has gone on a streak of acquisitions, including a $3.6bn purchase of Nortek’s custom air filtration business this year. Madison now made about $7bn in annual revenues, Gies said.

“It’s not the typical VC growth trajectory, but it’s really significant cash flow creation,” Gies said.

Heritage’s success partly hinges on the tight-knit community of venture capitalists and start-up founders that make up its investor base.

Heritage has invested in some of the biggest winners in Sequoia’s venture funds, including Stripe, the online payments company recently valued at $95bn. John Collison, a co-founder of Stripe, has also invested in Heritage and serves as a director of the firm’s advisory board, according to regulatory filings.

Johnson said the advisory board had “no participation in the day-to-day management of the business and no role in investment decision making”.

Heritage’s other investors have included former Google chief executive Eric Schmidt’s family foundation and large institutions such as the Oxford university endowment, according to their filings.

“Our job is to optimise the returns for the Heritage investors,” Johnson said, “as opposed to trying to enhance returns for Sequoia Capital.”



Source link

67 Comments
  1. Dkdelo says

    order generic levaquin order levofloxacin 500mg online

  2. Virueq says

    brand avodart avodart for sale zofran 4mg oral

  3. Skdyli says

    order generic spironolactone order valacyclovir fluconazole generic

  4. Eavnxi says

    cheap ampicillin buy bactrim 480mg pills order erythromycin 250mg for sale

  5. Wyfgfv says

    fildena 50mg ca nolvadex sale order methocarbamol 500mg pill

  6. Mwgssf says

    order suhagra pill order estrace 1mg pills estradiol 2mg price

  7. Lgocof says

    lamotrigine medication buy retin cream buy retin gel sale

  8. Djvbtr says

    order tadalafil avanafil usa voltaren price

  9. Nlfldv says

    order accutane 10mg without prescription amoxicillin 250mg drug buy generic zithromax

  10. Flammr says

    order indocin 75mg online buy indomethacin without prescription cheap trimox 250mg

  11. Rcjmvp says

    buy cialis without prescription cialis tablets cheap sildenafil for sale

  12. Uhumir says

    brand anastrozole 1 mg viagra headquarter toronto viagra usa

  13. Bbgqaf says

    cialis en france tadalafil 40mg sans ordonnance en france acheter 25mg viagra en ligne

  14. Btctfd says

    cheap deltasone 40mg prednisone 10mg tablet sildenafil 50mg pill

  15. Ikewkc says

    tadalafil 20mg kaufen ohne rezept sildenafil kaufen viagra 100mg kaufen ohne rezept

  16. Ifvfaf says

    cheap ramipril order astelin online cheap buy azelastine 10 ml sale

  17. Kxfnyx says

    buy clonidine 0.1mg for sale order antivert sale order spiriva 9 mcg sale

  18. Xeoene says

    buspirone 10mg tablet phenytoin buy online oxybutynin online

  19. Vyvwln says

    purchase terazosin generic terazosin 1mg without prescription sulfasalazine 500 mg tablet

  20. Odawsw says

    fosamax 35mg for sale buy famotidine 20mg without prescription order famotidine 20mg pills

  21. Iqmwzu says

    cheap olmesartan 10mg brand acetazolamide acetazolamide 250mg ca

  22. Rpstnq says

    tacrolimus 5mg drug urso us ursodiol online order

  23. Qktqfv says

    brand bupropion 150mg zyban for sale buy seroquel

  24. Oxgtks says

    molnupiravir brand buy lansoprazole 30mg lansoprazole 30mg pills

  25. Axelyw says

    buy sertraline generic cheap sildenafil 100mg buy sildenafil pills

  26. Fbyhly says

    salbutamol over the counter purchase protonix sale cheap sildenafil online

  27. Vkgyam says

    cialis 5mg uk Best price for generic cialis viagra oral

  28. Qqrtvx says

    cialis for daily use cialis pill buy symmetrel 100 mg online

  29. Fkfcrk says

    order revia 50mg order letrozole for sale buy abilify 20mg pills

  30. Lcgrdy says

    order provera 10mg sale order hydrochlorothiazide 25 mg pills buy periactin for sale

  31. Pgfmqt says

    buy provigil buy stromectol 6mg generic ivermectin 2mg

  32. Zlnldc says

    buy accutane 10mg sale accutane 40mg drug purchase deltasone online

  33. Uujjnh says

    piracetam for sale online piracetam 800 mg usa buy viagra pills

  34. Bvwdtk says

    azithromycin over the counter order prednisolone without prescription neurontin 600mg price

  35. Ugrzvn says

    cialis pills tadalafil 5mg canada buy viagra 50mg pills

  36. Telwep says

    furosemide order hydroxychloroquine pills plaquenil cost

  37. Espyzv says

    order glucophage 500mg sale buy lipitor 80mg pill purchase tadalafil

  38. Lqvmyz says

    cost zyprexa 10mg bystolic generic order generic diovan

  39. Sfgsqx says

    order amlodipine pills tadalafil 5mg uk generic tadalafil 20mg

  40. Bomnpy says

    sildenafil mail order us order viagra online lisinopril 5mg drug

  41. Lkoosc says

    omeprazole 10mg generic buy a research paper online best online poker sites for real money

  42. Gckwhn says

    buy linezolid without prescription buy zyvox sale blackjack online game

  43. Hweqks says

    metoprolol for sale tenormin 50mg drug buy vardenafil 20mg pills

  44. Gfykms says

    vardenafil 20mg cheap buy pregabalin online methylprednisolone 16 mg tablet

  45. Irgaot says

    purchase essays sildenafil tablets viagra australia

  46. Apbxhf says

    cialis 20mg cheap tadalafil 5mg uk viagra 50mg pills

  47. Dttdkd says

    buy triamcinolone 10mg pills cheap clarinex 5mg clarinex for sale online

  48. Chffdi says

    cialis 5mg oral sildenafil 100mg pills for men sildenafil for men over 50

  49. Wugdkz says

    orlistat canada order zovirax 800mg generic zovirax order

  50. Srxixx says

    tadalafil pills tadalafil 5mg brand clopidogrel over the counter

  51. Obzngo says

    buy allopurinol 300mg for sale zetia price purchase zetia pills

  52. Mwcmpi says

    order methotrexate 5mg pills buy warfarin 5mg generic order metoclopramide 20mg sale

  53. Rpeimx says

    buy motilium 10mg pill buy sumycin 250mg pill cheap cyclobenzaprine 15mg

  54. Qgsapm says

    buy losartan generic purchase cozaar sale topamax 100mg usa

  55. Ucmbgs says

    sumatriptan 50mg over the counter buy avodart pill purchase dutasteride pill

  56. Aycsvx says

    colchicine usa slot game blackjack game

  57. Neeiae says

    buy zantac purchase zantac online celecoxib 100mg canada

  58. Owhuvf says

    free blackjack online ladbrokes uk free casino slot games

  59. Zpiemq says

    order flomax 0.2mg for sale zofran drug buy aldactone sale

  60. Aytgij says

    buy tadalafil 5mg generic order cialis 10mg sale cipro 500mg over the counter

  61. Kjzrrz says

    simvastatin usa buy generic zocor 10mg order propecia generic

  62. Nkahrb says

    metronidazole for sale online flagyl 400mg usa order bactrim online cheap

  63. Imeaha says

    purchase fluconazole sale generic viagra 100mg order viagra online

  64. Sheenz says

    tadalafil 10mg cost cialis 5mg drug viagra sildenafil 50mg

  65. Iiflyp says

    buy sildenafil 100mg for sale sildenafil 50 mg cialis pills 5mg

  66. Umeerb says

    cefuroxime 500mg uk bimatoprost allergy spray robaxin 500mg generic

  67. Egcdyo says

    casino gambling sports gambling tadalafil 40mg cheap

Leave A Reply

Your email address will not be published.