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Thomas Steyer is the founder of Farallon Capital Management. He founded Farallon in 1986. Since its inception, the hedge fund has returned 14.5% annually. Farallon Capital Management is the world’s 14th largest hedge fund. U.S equities make up a small percentage of Farallon’s equity portfolio. At the end of December 2010, the equity investments summed up to $3.3 billion which is less than 15% of Farallon’s AUM.

In the second quarter, Thomas Steyer reduced Viacom Inc (VIA-B) by 25%, Schwab Charles Corp (NYSE:SCHW) by 9%, Croqn Castle International Corp (NYSE:CCI) by 24%, and Microsoft Corp (NASDAQ:MSFT) by 11%. Since the end of June, Viacom lost 7%, Schwab Charles Corp lost 24% while Microsoft gained 2% and Crown Castle gained 4%. Since the end of June, Thomas Steyer’s top 13F holdings lost 8.6% vs. -7.8% for SPY. Here are Tom Steyer’s top stock picks in his 13F portfolio at the end of June:

Company

Ticker

Value (x1000)

Activity

Return Since June

VISA INC Calls

V

283956

New

5%

TARGET CORP

TGT

172910

7%

9%

HUDSON PACIFIC PROP

HPP

158932

44%

-9%

ORACLE CORP

ORCL

148424

6%

-15%

VIACOM INC NEW

VIA.B

147115

-25%

-7%

STATE STREET CORP

STT

138877

8%

-22%

VISA INC Puts

V

125278

New

5%

COMCAST CORP NEW

CMCSA

106681

59%

-15%

SCHWAB CHARLES

SCHW

105527

-9%

-24%

GENERAL DYNAMICS

GD

101608

69%

-14%

CROWN CASTLE INTL

CCI

95449

-24%

4%

WELLS FARGO & CO

WFC

94422

26%

-9%

TRANSDIGM GROUP

TDG

90406

2%

-1%

B M C SOFTWARE INC

BMC

89708

1%

-26%

LIBERTY GLOBAL INC

LBTYA

87378

15%

-13%

MICROSOFT CORP

MSFT

82550

-11%

2%

BP PLC

BP

79501

New

-10%

FEDEX CORP

FDX

77718

New

-17%

EXPEDIA INC

EXPE

76824

New

4%

FIDELITY NATIONAL INFO

FIS

73896

14%

-9%

Thomas Steyer bought call and put options of Visa Inc. during the second quarter. The call options made up 7.92% and put options made up 3.49% of Farallon’s equity portfolio at the end of June. Thomas Steyer probably didn’t make much money from the options position as Visa gained only 5% since the end of June. However it is better than most other long positions as the S&P 500 index lost 7.8%. Jean-Marie Eveillard’s First Eagle Investment Management also has a stake in Visa. He increased the company by 123% during the second quarter (take a look at Jean-Marie Eveillard’s top stock picks).

Oracle Corp. is the fourth largest holding of Farallon Capital. Farallon has $148 million invested in Oracle. Thomas Steyer increased his stake in the company by 6% in the second quarter. Since the end of June, Oracle lost 15%. Lee Ainslie added Oracle Corp to Maverick Capital’s equity portfolio during the second quarter. He has 8.46 million shares of Oracle worth $278 million (check out Lee Ainslie’s latest holdings).

Wells Fargo & Co. lost 9% since the end of the second quarter. Wells Fargo is one of Warren Buffett’s favorite stocks. At the end of June, he had $9.88 billion invested in the company (see Warren Buffett’s favorite stocks). Thomas Steyer increased his stake in Wells Fargo by 26% in the second quarter. He has $94 million invested in the company.

Target Corp. is the second largest holding of Farallon Capital. During the quarter ending June, Thomas Steyer increased stake in Target Corp by 7%. He has $172 invested in the company. Steyer profited from his investment in Target as the company gained 9% since the end of June. Farallon Capital has the highest position in Target while Larry Robbins’ Glenview Capital has the second largest position.

Viacom Inc. lost 7% since the end of June. Farallon Capital reduced its stake in Viacom by 25% during the second quarter. Thomas Steyer has one of the top 5 positions in the company. He has $147 million invested in Viacom. Eric Mindich’s Eton Park Capital has the highest position in the company. Mindich reduced his stake in Viacom by 29% during the second quarter (view Eric Mindich’s latest stock picks).

Microsoft, Crown Castle, Expedia, and Transdigm are Steyer’s other stock picks that outperformed the market. His positions in high profile stocks such as BP, FDX, and General Dynamics underperformed the market though. Overall we like Tom Steyer and we believe that investors can outperform the market over the long term by imitating his top stock picks.

Source: Farallon Capital's Top Stock Picks