US billionaire's 'Road to Damascus': From black to green

May 13 2014, 15:02 IST
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SummaryBillionaire Tom Steyer has rapidly become one of America's most visible environmental advocates, vowing to punish lawmakers who don't oppose climate change and pledging to spend up to $100 million to put the issue center stage in the Nov. 4 elections.

Billionaire Tom Steyer has rapidly become one of America's most visible environmental advocates, vowing to punish lawmakers who don't oppose climate change and pledging to spend up to $100 million to put the issue center stage in the Nov. 4 elections.

His in-your-face tactics have made him fierce enemies on the right who accuse him of hypocrisy and claim that he made much of his fortune through investments in fossil fuel energy at Farallon Capital Management, the San Francisco-based hedge fund he founded in 1986.

Steyer, 56, stepped down as co-managing partner of Farallon in 2012 to devote himself to full-time activism because, as he later wrote, he "no longer felt comfortable being at a firm that was invested in every single sector of the global economy, including tar sands and oil."

But he has provided few details of the extent of those fossil fuel investments or how he profited from them. He said in July 2013 that when he had left Farallon, which manages much of his estimated $1.6 billion wealth, he had instructed the fund to divest his holdings in fossil fuels. Neither he nor Farallon has said whether that process has been completed. Farallon declined to comment.

A spokesman for Steyer declined to comment for this article.

Until now, most of the conservative ire against Steyer has focused on Farallon's energy investment record in the United States. Little attention has been paid to foreign investments such as its forays into Asian coal.

During Steyer's tenure, Farallon helped finance coal project acquisitions in Indonesia and Australia valued at more than $2 billion and covering some of the region's biggest mines, some of which swiftly ramped up production afterward, according to a close examination by Reuters of company disclosures and interviews with people involved in the deals.

While Farallon has not made public its shares in these deals, sources familiar with the fund's dealings say they amounted to at least several hundred million dollars.

The Asian coal investments were mostly conducted through Noonday - a unit of Farallon set up by Steyer's deputy, Andrew Spokes, in 2004. Spokes co-led Farallon from 2007 and succeeded Steyer after his departure. In Steyer's final note to investors in 2012, he said Spokes "embodies values in which I believe and which distinguish our firm."

People familiar with Steyer's management of Farallon said that while his main focus was on the United States, he would have signed off on those foreign deals and,

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