Sequoia Fund Investor Day Transcript

[Jurgis]

My instinct would be to go with AKREX - only caveat being how long he'll be there for, and if his retirement will see many redemptions.  I know the others have been there a while, and so they've got a better chance than most at continuing, but succession is hard.

 

I just think Akre is class - the concentration, low-turnover is impressive, they haven't made many mistakes, and it's run by the founder with a very defined philosophy.  I mean, I'm sure you know all this...

 

Sequoia has an illustrious past, but it's not all the OG team any more, it feels more sprawling, a bit more turnover, and... Valeant.  I still think they're impressive compared with most other funds, but I don't feel as comfortable as I do about Akre.

 

I kind of hate the "well if he didn't buy this then..." analysis, but Akre has made his career buying/holding AMT (not unlike many great investors such as Graham (GEICO), Sleep Zakaria (AMZN/COST), etc. I am not saying that he/they are bad investors (they have absolutely kicked my ass and outperformed the S&P over the course of a great bull market). I just think that before you buy Akre, you have to have an opinion on the 12/3% position in AMT. they won't ever sell and it's an extremely "expensive" stock at $136 billion EV, which is 5x the gross value of its property, over half of which has been bought/built since 2012, 16x EV / 2021 Sales, 26x EBITDA, 24x FFO. I am just a bitter / jealous real estate oriented value guy whose index has AMT in it, so take my analysis as the sour grapes that it is. I have thus far resisted the temptation to short it as it's just one of these "inevitables/teflon" stocks.

 

You can buy a lot of property for $136 billion.

 

Yeah, it's funny: pandemic comes and they are teflon positioned for it with AMT.  8)

 

Disclosure: I have started buying AKREX this year (before pandemic and during). This might mean that it will crash/underperform for the next 10 years+