Tom Steyer, founder of Farallon Capital Management, is one of the most successful alumni from Robert Rubin's former risk arbitrage team at Goldman Sachs.
His San Francisco based investment management firm has just under $5B in equity assets under management, and is often referred to as "the McKinsey of hedge funds" -- in reference to the top consulting firm in existence.
According to an article from Fortune magazine, "Farallon has achieved a 16% compound annual return since 1986, compared with about 10% for the S&P 500 index."
In terms of strategy, Steyer's "absolute return" investment philosophy focuses on risk-adjusted returns. It treats all investments as a bond, with an implied rate of return, and uses very little leverage. According to Steyer, this results in a "strategy that neither shoots the moon nor tends to lose much in tough times."
According to Farallon's most recent 13F SEC filing, the fund holds approximately $2.7B in equities traded in the big three (AMEX, NASDAQ, and NYSE), which implies a 37% increase from the previous filing.
Within this portfolio, its biggest holding seems to be Viacom, the holding company of MTV networks and Paramount Pictures -- the producer of the upcoming "Transformers: Dark Of The Moon."
It is also worth noting that the fund significantly increased its positions on Target, a major retailer, and Castle Crown, a technology/communications company. (Click here for free, interactive tools to analyze these ideas.)
List of Farallon's Top 5 Holdings
4. Crown Castle International
5. State Street (STT): Regional Bank. Market cap of $21.25B. Shares held as of Dec. 31, 2010: 1,975,000 vs. 2,865,000 shares held as of March 31, 2011. This position changed by 45.06% and it represents 3.81% of the portfolio as of the most recent filing.
List of Farallon's Top 4 Increases
1. Target: Discount, Variety Stores Industry. Market cap of $32.29B. Shares held as of Dec. 31, 2010: 1,510,000 vs. 3,459,000 shares held as of March 31, 2011. This position changed by 129.07% and it represents 5.12% of the portfolio as of the most recent filing.
2. Crown Castle International
3. Baxter International
4. Dollar General
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Disclosure: Kapitall's Eben Esterhuizen does not own any of the shares mentioned above.
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