Managing Risk
It’s a puzzling decision for Steyer, whose prior career was about managing risk. He started Farallon with $15 million and soon earned a reputation as a conservative and reliable steward of money. He shunned leverage and deployed capital across mainstream asset classes such as corporate and government bonds and blue-chip stocks. And taking a page from his Goldman days, Farallon bet on the shares of companies in the midst of deals.
Steyer, who was a hands-on money manager, was careful to stay liquid and wasn’t adverse to holding sizable positions in cash when he sensed danger in the market. Farallon came through the crash of 1987 up 3.2%.
The fund, which was heavily invested in real estate and distressed debt, didn’t fare so well in the 2008 credit crisis, falling 35% that year. It was the first annual loss on Steyer’s watch. Two years later, four senior Farallon executives left to start their own firm. At the end of 2012, it was the founder himself who headed for the door. Steyer was succeeded by Andrew Spokes, a former Goldman Sachs investment banker who had worked at Farallon since 1997.
During his tenure at Farallon -- he was also a managing director at Hellman & Friedman, the San Francisco private equity firm led by the late Warren Hellman -- Steyer was a sphinx. He rarely gave interviews and almost never appeared on television.
Yet since quitting the investing business six years ago, he’s become quite comfortable taking the kinds of risks he would have shunned in his prior life. He’s become a fixture on cable news shows, lambasting Trump as a “clear and present danger” who can’t be trusted with the nuclear button. And he’s accused the president of rigging the system to benefit billionaires like himself.
Much of his activism is driven by a belief that climate change poses an existential threat to humankind. He’s donated millions to climate change policy research programs at Stanford and hasn’t been shy about decrying the very corporations that he used to invest in.
“I think people believe corporations have bought democracy, that politicians don’t care about or respect them,” he said Tuesday in a video announcing his candidacy.
--With assistance from Ben Steverman and Max Abelson.
This article was provided by Bloomberg News.