Farallon Capital

Farallon Capital Management, L.L.C.

Company type	Private
Industry	Hedge fund, Investment management
Founded	January 1986 (1986-01)
Founder	Tom Steyer
Headquarters	San Francisco , United States
Area served	Worldwide
Key people	Nicolas Giauque (Managing Partner)
Products	Multi-strategy hedge fund, investment management
Number of employees	230

Farallon Capital Management, L.L.C. is a U.S.-based multi-strategy hedge fund operating out of San Francisco, California. Established in 1986 by Tom Steyer, the company employs approximately 230 staff members spread over eight nations.

The firm primarily manages assets for university endowments, charitable foundations, and high-net-worth individuals, with total assets under management near $39 billion.

History

Tom Steyer founded Farallon in January 1986, starting with $15 million in seed funding, leveraging his prior roles at Hellman & Friedman, Goldman Sachs under Robert Rubin, and Morgan Stanley’s mergers and acquisitions division.

Farallon was among the earliest hedge funds to obtain capital from a university endowment. In 1987, Steyer sought to manage funds for Yale’s endowment but was initially declined due to fee concerns. Yale’s Chief Investment Officer, David Swensen, arranged a no-fee agreement for an initial investment. After delivering strong performance, Farallon attracted additional commitments from other university endowments and pension funds, solidifying its reputation in managing institutional capital.

Investment strategy

Farallon was a pioneer in absolute return investment approaches that focus on both return potential and risk-adjusted outcomes. Its portfolio spans various asset classes such as value equities, credit instruments, merger arbitrage, real estate, and direct investments across developed and emerging economies. Typical investment horizons range from two to five years.

Founder Tom Steyer describes himself as a fundamentally research-driven investor rather than an active trader. The firm also utilizes "event driven" tactics aimed at distressed companies internationally to support restructuring efforts and unlock value.

Among its significant investments are a direct holding in an Argentine footwear manufacturer during the country's economic rebound and the 2002 purchase of Indonesia’s Bank Central Asia (BCA) for $531 million amid a turbulent banking sector. Farallon exited BCA in 2006 profitably, which played a role in boosting foreign direct investments into Indonesia.

In 2010, Farallon adjusted its strategy by increasing emphasis on risk arbitrage and credit markets while scaling back equity exposure. This shift was accompanied by enhanced transparency with clients to promote a culture of openness. The move reflects the firm’s flexible business model designed to maintain competitive positioning and foster sustainable growth over time.

Investment background

In 2007, Farallon collaborated with Simon Property Group and several other hedge funds to purchase Mills Corp, a real estate investment trust.

The firm possesses a stake exceeding 6% in the Japanese electronics corporation Toshiba, positioning it among the largest shareholders. Additionally, Farallon ranks within the top ten shareholders of biopharmaceutical firm Acceleron Pharma, where it has taken an active stance against Merck's proposed acquisition terms.

Company overview

By 2006, Farallon Capital had earned recognition as the world's largest hedge fund based on assets under management. Established by Tom Steyer, the company derives its name from the Farallon Islands located near its headquarters in the San Francisco Bay Area.

Organizational structure

Nicolas Giauque assumed the role of Managing Partner in 2025, following Andrew J.M. Spokes's leadership which began in 2012 after Steyer's exit. Spokes previously directed portfolio strategy and managed Farallon's subadviser, Noonday Global Management. He also inaugurated Farallon's first overseas office in London back in 1998.

The firm's organization comprises 21 principals, 13 managing directors, and 35 investment professionals who collectively manage daily operations and oversee investment activities.

Global offices

To facilitate its worldwide operations and strategic investments, Farallon operates offices located in San Francisco, São Paulo, Tokyo, Singapore, London, and Hong Kong.

See also

• Hedge fund
• Risk arbitrage
• Tom Steyer