Thomas Steyer, the founder and lead investment manager of Farallon Capital, announced in a letter to his shareholders that he is stepping down from the helm after steering the hedge fund for more than two and a half decades.
Mr. Steyer started the fund in 1986 with a meager 15 million dollars and helped the fund's assets mushroom to a 20 billion dollar global behemoth. Since its inception the hedge fund returned 13.4% annualized (for 27 years!) and is up 9.5% year to date. His own net worth is estimated at $1.3 billion.
The stewardship is being handed over to Andrew Spokes who joined Farallon Capital in 1997 and now will be the only Managing Partner in the firm. According to the letter, the legacy planning has been going on for a while: ""The transfer to Andrew has proceeded steadily and deliberately for five years. Now it is time for him to take the reins alone … the playbook won't change when I leave."
In the letter, Mr. Steyer further reassures his investors that things will proceed as before and that Mr. Spokes will continue running the hedge fund as it was before. "The announcement is the natural next step, is accepted internally and won't change our mode of operation" and "Our vision is very simple: we aspire to be the investment firm of which we, ourselves, would want to be clients." (It seems though that Mr. Steyer's profits in the partnership are being bought out.)
On a personal note, Mr. Steyer states: "I want my life to revolve around service in one form or another, including continuing participation in our community bank, in encouraging the advanced energy economy and in specific policy initiatives here in California." This is in line with his recent involvement in political initiatives such as global warming, energy independence, tax loop-holes, and his endorsement of President Obama at the DNC.
We recommend our Profile of Mr. Steyer's hedge fund that tracks his investment success. In the profile, we note that the fund was named after a chain of shark-infested islands off the coast of California.
Because of Mr. Steyer's focus on the preservation of capital, we believe that the reference to sharks was to all the trends in the market that can eat away one's invested capital.
Now that there is speculation that Mr. Steyer might join politics, we wish him luck and note with irony that the theme of Farallon Islands continues in his new life. Not that he is not aware of it: When asked in 2011 if he would join politics, he quipped "Let me just say, I can't imagine a worse job."