Thomas Steyer: Investing Shark with a Heart
The world of capital management is known for its sharks: enterprising financial go-getters who take their ambition to the next level. In the case of Mr. Thomas Steyer, however, the sense of ambition is equally tempered with a sense of purpose – and altruism.
Thomas Fahr Steyer, commonly known as Tom, was born in New York City in 1957 and attended Phillips Exeter Academy and then Yale University, where he studied political science and economics; in 1983, he earned his M.B.A. from Stanford University. After working at Morgan Stanley, Mr. Steyer solidified his reputation as an aggressive but profitable investor at Goldman Sachs.
His aggressiveness carried over into the next phase of Thomas Steyer’s career when he left Goldman Sachs in 1986 to found Farallon Capital Management, a hedge fund named after a group of islands near San Francisco known for their shark-infested waters. Balancing fundamental, bottom-up analysis with risk-management analytics, San Francisco-based Farallon manages $20 billion in capital for individuals, university endowments, charitable foundations, and pension plans.
Started with $15 million in seed capital, Farallon Capital Management made a name for itself by being one of the first firms to raise money from a university endowment. Additionally, Farallon and Thomas Steyer became pioneers of absolute return investing, a model focused on potential returns as well as risk-adjusted returns.
Mr. Steyer’s firm has expanded considerably, both in size and in repute, since its establishment in January of 1986. In fact, Farallon Capital now has approximately 200 employees and a global presence in San Francisco (where its headquarters are located), London, Singapore, Hong Kong, Tokyo, and São Paulo.
After running Farallon Capital for 26 years and amassing a personal fortune of $1.6 billion, Tom Steyer sold his stake in 2012 and switched his focus to politics and the environment. As the founder of the environmental group NextGen Climate, Mr. Steyer is a passionate advocate of the clean energy movement. In that vein, Tom and his wife, Kat Taylor, co-founded two renewable-energy research institutions at Stanford University, the TomKat Center for Sustainable Energy and the Steyer-Taylor Center for Energy Policy and Finance.
Tom and his wife are also involved in a massive-scale charitable effort: the “Giving Pledge,” a promise to donate the majority of their wealth to charitable activities during their lifetimes (also joined by the likes of Warren Buffett as well as Bill and Melinda Gates). Also, Thomas and Kat created and funded the Oakland-based Beneficial State Bank, which provides loans and banking services to underserved small businesses, communities, and individuals along the West Coast.
Yes, Thomas Steyer does swim with the sharks. The difference, however, is that he’s a shark with his priorities in place – and his heart is bigger than his bite.