Thomas Steyer's Farallon Buys Initial Stake in Google

BOSTON (TheStreet) -- Thomas Steyer, the billionaire environmentalist and founder of hedge fund Farallon Capital Management, made big bets on merger mates Google (GOOG) and Motorola Mobility (MMI) in the third quarter.

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 numerous 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.

The latest merger-arbitrage investment for Steyer is Motorola Mobility, which was acquired by Google in August for $12.5 billion. At some point in the third quarter, Steyer's Farallon bought more than 10.5 million shares of Motorola Mobility, which carried a market value of nearly $400 million as of Sept. 30. That new position alone became the largest of Steyer's disclosed holdings.

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 third quarter with 66 reported holdings with a market value of $3.8 billion.

Google was another new purchase for Steyer, as he bought about 247,000 shares of the Internet search giant. The position had a market value of $127 million as of Sept. 30, and shares of Google have rallied 20% since the reporting date.

Farallon's other new buys in the third quarter included water and air treatment company Nalco Holdings ( NLC), glass-container manufacturer Owens-Illinois ( OI), aerospace company Goodrich ( GR) and News Corp. ( NWS). In total, the hedge fund reported 16 new holdings for the third quarter.

Steyer also increased his stake in 15 companies, including big buys in large-cap companies like Comcast ( CMCSA), Visa ( V), Medco Health ( MHS), Microsoft ( MSFT), General Dynamics ( GD), Union Pacific ( UNP) and Home Depot ( HD), among others.

>>View Farallon Capital's Portfolio

On the other hand, Steyer sold completely out of stakes in 11 stocks, including companies he had just picked up in the second quarter. FedEx ( FDX), Expedia ( EXPE) and Youku.com ( YOKU), which were new purchases a quarter earlier, were dumped completely, alongside BMC Software ( BMC) and Sina ( SINA).

Farallon also cut stakes in 10 stocks, including Viacom ( VIA.B), Charles Schwab ( SCHW) and Crown Castle International ( CCI).

-- Written by Robert Holmes in Boston.

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