Having a permanent capital structure may allow employees with equity in portfolio companies to tender their shares for shares in the Sequoia Fund itself. Presumably those would be much more liquid.
Sure common stock has a discount to preferred stock, but it's not an infinite discount, and it's mostly applicable in the pessimistic scenario. If employees are exercising their options, it's usually because the portfolio company in question has performed well.
Sequoia would most likely be happy to acquire shares in those companies at reasonable discounts to preferred, which would make both parties happy. With a permanent capital structure, the most logical thing to do is for them to keep levering up positions in their winning positions.
Edit: But maybe that doesn't apply to selling shares on the private market, only buying? Also if it's written into the initial option grant, perhaps that's a way out too.