In announcing new Sequoia Fund position limits, the highly concentrated fund portfolio management philosophy is adding a wrinkle of systematic control but doesn't want to admit as much.
There is sometimes a battle between discretionary fund managers and quantitative analysts that suggests the two disciplines are entirely different. But the recent decision regarding Sequoia Fund position limits shows how systematic portfolio management can work side-by-side discretionary managers to use a rules based approach. It also shows how systematic rules can ring-fence a discretionary manager into logical diversified thinking. Just don't tell that to the management at the concentrated fund, they say processes have not materially changed.
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