Environmentalist Hedge Fund Buys BP

BOSTON ( TheStreet) -- Thomas Steyer, the billionaire environmentalist and founder of hedge fund Farallon Capital Management, initiated a stake in BP ( BP), the oil company responsible for the April 2010 spill in the Gulf of Mexico.

Steyer founded Farallon Capital in 1986 and has served as the fund's managing partner. Based in San Francisco, Farallon has more than $20 billion in assets and uses multiple investment strategies ranging from credit to value to merger-arbitrage investments. The hedge fund has a disciplined approach to preserve capital, focusing on achieving risk-adjusted returns.

Thomas Steyer of Farallon Capital Management.

Considering the Deepwater Horizon explosion last year, BP is an unusual investment for Steyer, who with his wife donated millions to a create a sustainable-energy center at Stanford University in 2008. Farallon bought 1.8 million shares of BP during the second quarter, which had a market value of nearly $80 million as of June 30, according to the fund's latest 13F filing with regulators.

Hedge funds that manage more than $100 million are required to disclose their equity holdings, options and convertible debt on a Form 13F filed to the Securities and Exchange Commission within 45 days of the end of a quarter. Funds aren't required to report short positions betting on declines. Farallon Capital ended the second quarter with 61 reported holdings with a market value of nearly $3.1 billion.

Farallon's other new buys in the second quarter included FedEx ( FDX), Expedia ( EXPE), Youku.com ( YOKU), and Tenet Healthcare ( THC). In total, the hedge fund reported 15 new holdings for the second quarter.

Steyer also increased his stake in 17 companies, including big buys in mid-cap real-estate stock Hudson Pacific Properties ( HPP) and Comcast ( CMCSA). Farallon bought 3.1 million shares of Hudson Pacific to bring its total position to 10.2 million shares. The fund added more than 1.5 million shares of Comcast to bring its overall position to 4.2 million shares.

Farallon also added to stakes in General Dynamics ( GD), Union Pacific ( UNP), Wells Fargo ( WFC) and Oracle ( ORLC), among others.

On the other hand, Steyer sold completely out of stakes in 17 stocks, including Dollar General ( DG), Whirlpool ( WHR) and Quest Diagnostics ( DGX). As the fund has a merger arbitrage focus, several holdings were acquired during the second quarter, including Genzyme and assey Energy.

Farallon also cut stakes in 10 stocks, including Microsoft ( MSFT), Visa ( V) and Crown Castle International ( CCI).

-- Written by Robert Holmes in Boston.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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