Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Farallon Capital: A Global and Diversified Hedge Fund and its Top Stock Picks

In this article, we discuss Farallon Capital: a global and diversified hedge fund and its top stock picks. If you want to skip our detailed analysis of these stocks, go directly to the Top 5 Stock Picks of Farallon Capital

Risk arbitrage or merger arbitrage is one of the most popular strategies that hedge funds and other institutional investors leverage to try and capitalize on the outcome of a proposed merger. Founded in 1986 by Tom Steyer and Fleur Fairman, Farallon Capital is one of the most popular asset investment firms that has perfected the art of risk arbitrage.

Headquartered in San Francisco, Farallon Capital gets its name from the Farallon Island off the Coast of San Francisco. The hedge fund came into being after Steyer had launched his career in finance at Morgan Stanley, after which he earned an MBA at Stanford and ended up joining Goldman Sachs.

It is at Goldman Sachs that Steyer will get insights on the legendary merger arbitrage strategy that he would use to kick start his career at Farallon Capital and end up becoming a billionaire. Despite losing 36% at the height of the 2008 financial crisis, Farallon managed to average a 13.4% annual rate of return from its founding years.

The hedge fund tries to unlock value on the discount that emerges whenever a merger is made public. In most cases, the fund acquires the equity of the target company as its share price often explodes as the market comes to terms with the notion it is poised to be bought at a significant premium. On the other hand, the hedge fund also tends to trigger a sell short on the stock of the buying company. The risk arbitrage strategy has allowed Farallon Capital to accrue significant returns while capitalizing on the risks attached to the mergers.

Farallon shot to prominence in 1996 after British Telecommunication decided to merge with MCI Communications in a deal that was expected to take nine to 12 months. The hedge fund had taken a long position in MCI shares as part of the $25 billion acquisition. It also took a short position on BT shares.

Farallon Capital would experience a significant shock in its position after MCI announced it was facing difficulties in entering the local telephony market, which resulted in $800 million in losses. The investment represented the most significant risk arbitrage exposure that prompted the hedge fund to explore whether to stay in the position. Despite the shock, the hedge fund has invested in over 100 merger arbitrage positions.

The risk arbitrage hedge fund also placed a $300 billion bet as Microsoft Corporation (NASDAQ:MSFT) moved to acquire LinkedIn for $26.2 billion in 2016. With the investment, the hedge fund sought to collect about $6 a share on the difference between the prevailing price and the price at which the deal was to close.

In addition to pursuing opportunities around risk arbitrage, Farallon also seeks investment opportunities across asset classes worldwide through bottom-up fundamental research and analysis. Credit investments, long/short equity and real estate investments account for a significant share of the hedge fund portfolio, with about $36 billion in capital under management.

Regulatory filings indicate Farallon Capital remains heavily invested in the healthcare sector, with technology stocks also accounting for a significant portfolio share. The hedge fund invests in economies worldwide, including developed and emerging markets and public and private debt.

After stepping down from their lucrative career as a hedge fund manager, Steyer is channeling his efforts into saving the planet. In addition to running for president in 2020, Steyer has been interested in sustainability. Galvanize Climate Solutions is one of his new investment firms that has raised $1 billion in climate investment funds. The funds will be invested in early and growth climate startups focusing on those working on decarbonization efforts.

Farallon Capital has been aggressive, taking advantage of opportunities that have cropped up with the opening of the global economy. The hedge fund has built a massive stake in Chinese internet giant Alibaba Group Holding Limited (NYSE:BABA) as it bets on the Chinese economy, which is seeing increased inflows.

The hedge fund has also succeeded in its activist campaign at oncology-focused biotech company Exelixis, Inc. (NASDAQ:EXEL). It successfully refreshed the company’s board as part of its 7.8% stake.

“They’re “ready to work constructively with the rest of the board to fulfil the mandate they received from shareholders and help the company better allocate capital and focus its R&D efforts,” Farallon said in a statement.

Our Methodology

After analyzing the hedge fund’s 13G fillings, we have settled on Farallon Capital’s top stock picks from which it leveraged the risk arbitrage strategy to generate returns. The stocks are ranked chronologically based on the value of the stakes that the hedge fund holds. The article also gives readers unique data on how hedge funds feel about each stock. This data is based on the analysis of 910 hedge funds that Insider Monkey follows.

Farallon Capital: A Global and Diversified Hedge Fund and its Top Stock Picks

10. Better Therapeutics, Inc. (NASDAQ:BTTX)

Farallon Capital Equity Stake: $357,069

Number of Hedge Fund Holders: 2

Better Therapeutics, Inc. (NASDAQ:BTTX) is a prescription digital therapeutics company that develops a form of cognitive behavioural therapy for addressing the causes of cardiometabolic diseases. BT 001 is the company’s lead product for treating type 2 diabetes. Better Therapeutics, Inc. (NASDAQ:BTTX) also develops software-based prescription digital therapeutics platforms for treating heart disease and other cardiometabolic conditions.

Farallon Capital started investing in Better Therapeutics, Inc. (NASDAQ:BTTX) in the fourth quarter of 2021. It currently owns stakes worth $357,069. A total of two hedge funds in Insider Monkey’s database had stakes in Better Therapeutics, Inc. (NASDAQ:BTTX).

9. Marblegate Acquisition Corp (NASDAQ:GATE)

Farallon Capital Equity Stake: $1.56 Million

Number of Hedge Fund Holders: N/A

Marblegate Acquisition Corp (NASDAQ:GATE) is a company that focuses on operating and acquiring businesses in the transportation and mobility sector. It is one of Farallon’s top stock picks in the financial services sector focused on effecting mergers, asset acquisition, stock purchases, and reorganizations.

Marblegate Acquisition Corp (NASDAQ:GATE) is one of the smallest holdings in the Farallon Capital portfolio. The hedge fund owns stakes worth $1.56 million, having started acquiring stakes in 2021. The most significant stakeholder of Marblegate Acquisition Corp (NASDAQ:GATE) was Glenn Russell Dubin’s Highbridge Capital Management, which had a $2.33 million stake in the company.

8. ARYA Sciences Acquisition Corp IV (NASDAQ:ARYD)

Farallon Capital Equity Stake: $2.13 Million

Number of Hedge Fund Holders: N/A

ARYA Sciences Acquisition Corp IV (NASDAQ:ARYD) is a company that has no significant business activities. Its main goal is to merge with or acquire one or more other businesses through various methods. The company was founded in 2020 and has its headquarters in New York City.

Farallon Capital had a position of 200,000 shares in ARYA Sciences Acquisition Corp IV (NASDAQ:ARYD). The hedge fund’s investment in ARYD was worth $2.13 million. The value of the hedge fund’s stake in ARYD accounted for 0.01% of its portfolio allocation.

7. Swiftmerge Acquisition Corp. (NASDAQ:IVCP)

Farallon Capital Equity Stake: $3.10 Million

Number of Hedge Fund Holders: N/A

Swiftmerge Acquisition Corp. (NASDAQ:IVCP) operates in the financial services sector focused on effecting mergers, share exchange, asset acquisition, share purchase and reorganizations. It also serves as a particular purpose acquisition company, or SPAC, to concentrate on the consumer sector.

Farallon bought 2,000,000 shares of Swiftmerge Acquisition Corp. (NASDAQ:IVCP) at its IPO price of $10 per share, according to a Form SC 13G filed with the SEC on January 29, 2021. It currently owns 300,000 shares stakes worth $97,020 after reducing its stake by 85% from the previous quarter.

The biggest hedge fund stakeholder of Swiftmerge Acquisition Corp. (NASDAQ:IVCP) was Vikas Mittal’s Meteora Capital, which owns a $4.65 million stake in the company.

6. Longboard Pharmaceuticals, Inc. (NASDAQ:LBPH

Farallon Capital Equity Stake: $7.34 Million

Number of Hedge Fund Holders: 12

Longboard Pharmaceuticals, Inc. (NASDAQ:LBPH) is one of Farallon Capital’s top stock picks in the healthcare sector that develops novel and transformative medicines for neurological diseases. The clinical biopharmaceutical company’s lead product is LP352, under trial for the treatment of seizures associated with developmental and epileptic encephalopathies.

Farallon Capital bought stakes at $16 a share when Longboard Pharmaceuticals, Inc. (NASDAQ:LBPH) went public in 2021. It has been buying and selling shares, taking advantage of the swings that have come into play. The hedge fund owns stakes worth $7.3 million, accounting for 0.04% of the portfolio.

Longboard Pharmaceuticals, Inc. (NASDAQ:LBPH) had 12 hedge funds invested in it in the second quarter of 2023 out of the 910 hedge funds tracked by Insider Monkey. 

Click to continue reading and see Top 5 Stock Picks of Farallon Capital.

Suggested articles:

Disclosure: None. Farallon Capital: A Global and Diversified Hedge Fund and its Top Stock Picks is originally published on Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

I’ve compiled everything you need to know about this groundbreaking company in a detailed, members-only report.

Trust me — you’ll want to read this report before putting another dollar into any tech stock.

For a ridiculously low price of just $9.99 a month, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single fast food meal!

Here’s why this is a deal you can’t afford to pass up:

• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.

• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.

• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149

• Bonus Reports: Premium access to members-only fund manager video interviews

• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.

• 30-Day Money-Back Guarantee:  If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

If you’re thinking about getting in, don’t wait – because once Wall Street catches wind of this story, the easy money will be gone.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99 a month.

2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a month later!

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 100+% Return within 12 to 24 months.

We’re now offering month-to-month subscriptions with no commitments.

For a ridiculously low price of just $9.99 per month, you can unlock our in-depth investment research and exclusive insights – that’s less than a single fast food meal!

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99.

2. Enjoy a month of ad-free browsing, exclusive access to our in-depth report on the Trump tariff and nuclear energy company as well as the revolutionary AI-robotics company, and the upcoming issues of our Premium Readership Newsletter.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!


No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a month later!