Investor Steyer leaving Farallon for politics, charity
BOSTON (Reuters) - Tom Steyer, the billionaire founder of hedge fund Farallon Capital, is leaving the firm at the end of the year, as the money manager and philanthropist who has become more involved in Democratic politics said it is time for him to "give back."
Speculation had been mounting for weeks that Steyer, 55, was mulling a change. He announced the decision in a letter to investors on Monday, saying Andrew Spokes, his long-time deputy, will take over running the $20 billion fund alone.
"As my role has shrunk over time, his has grown, and rightfully so," Steyer wrote. "Now it is time for him to take the reins alone."
Steyer is leaving the investment industry on a high note, with the San Francisco-based fund he founded in 1986 boasting strong returns, good health, and a promise of sticking with what has worked for decades.
"You should not expect any dramatic changes in the strategy or operations of the firm," Spokes wrote in a separate letter. "We will stay the course, but rest assured that we won't stand still."
A spokesman for Farallon declined to comment beyond the letter.
The fund, one of the world's biggest hedge funds, is up 9.5 percent this year and has returned an average of 13.41 percent to investors since its launch. At the end of June, the fund's biggest holdings included Hudson Pacific Properties, News Corp and CBS Corp.
Steyer joins a number of industry icons like Stanley Druckenmiller and Chris Shumway who have left the hyper-competitive hedge fund world at a relatively young age.
For the Yale- and Stanford-educated Steyer, he may be readying for a second career.
"Now it's time to focus full-time on giving back," he said in his letter, adding that he wants his life to revolve in some way or other around service. The investor's partners will be buying him out as part of his retirement.
Forbes magazine estimates Steyer's personal wealth at $1.3 billion and ranked him No. 347 on its list of the 400 richest people in America.
Steyer has long been generous with his money and is among the small number of super-wealthy Americans who pledged to donate half their estate to charity, supporting a campaign spearheaded by Bill Gates and Warren Buffett.
He has also become more involved in Democratic politics, speaking at the party's national convention in September where he was a delegate for California.
He has also funneled some $22 million into a California ballot initiative, Proposition 39, that would require multistate businesses to pay more in taxes in California by removing a provision that now allows them instead to pay more in lower-tax states.
Steyer has been grooming Spokes, 47, for some time, having made him a co-managing partner five years ago.
"He has done a superb job at every task he's undertaken," Steyer said.
Steyer, who offers a visible contrast to the raft of East -Coast hedge fund managers with his sartorial preference for tweeds and a red tartan tie, is by no means turning his back on Farallon, which manages money for prominent pension funds across the country.
He said is leaving the bulk of his money in the fund and urged other investors to do the same.
"I hope you all won't disappear when I'm not running the show anymore," he said at the end of his letter.
(Reporting By Svea Herbst-Bayliss; Editing by Ben Berkowitz, Gerald E. McCormick and Leslie Adler)