Opinion

How Did Tom Steyer Make His Money?

Tom Steyer, a hedge fund billionaire and Democratic presidential candidate, became a climate-change activist and prominent political donor to environmental causes. If you are keen on how Tom Steyer made his money? Keep on reading.

Tom Steyer reinvented himself from fossil fuel funder to climate warrior. His net worth reached $1.6 billion as a hedge fund manager while investing in coal, oil, and gas mains—a major political donor to environmental causes and Democrats advocating the ecological agenda to fight global warming.

Mr. Steyer launched his presidential campaign early in the hedge fund game, as he remains an investor in assets tied to the hedge fund he founded. He made millions through funds linked to his former company, Farallon Capital Management, and turned it into the world’s most considerable funds.

Initially, Tom Steyer made his fortune as the co-founder and senior managing partner of Farallon Capital Management. Later, he sold his stakes in the fund to focus on political, philanthropic, and environmental causes.

Steyer is spending millions to influence presidential elections, ballot initiatives, and state candidate campaigns. Keep on reading to learn about Tom Steyer’s wife and What did Tom Steyer do for a living, along with his political campaigns.

Introduction of Tom Steyer

Thomas Fahr Steyer, commonly known as Tom Steyer, was born on June 27, 1957, in New York City, America. A famous American business executive and philanthropist, Steyer is a businessman who founded Farallon Capital Management and a philanthropist who became a noted environmental activist.

Steyer left the financial world in 2012 and put the focus on politics and fighting climate change; he founded NextGen America to bring forth some progressive solutions in the areas of climate, education, healthcare, and immigration.

Steyer got national attention in 2017 when he started his “need to impeach” campaign against Donald Trump. He got into the Presidential run in the 2020 presidential elections; however, later on, he decided to quit the race in February 2020.

Tom Steyer’s family and education

Steyer was born into a wealthy family; his mother was a teacher, and his father was a partner at Sullivan and Cromwell’s law firm. Steyer has two brothers among one; Jim Steyer, a lawyer and professor at Stanford University and founded Common Sense Media. Common Sense Media is about rating movies, books, apps, and video games to help parents find suitable things for their kids.

Steyer attended a prestigious boarding school in Manhattan, followed by Phillip Exeter Academy, where he graduated. Then he moved to Yale University, where he majored in economics and political science. At Yale University, Steyer served as the captain of the soccer team. He continued with his education by going to Stanford Business School and earning an MBA in 1983.

Tom Steyer wife

Mr. Steyer married Kathryn Taylor on August 16, 1986, and has four grown children (Sam, Evelyn, Henry, and Charles). Kathryn Taylor is a Harvard and Stanford graduate. Steyer and his wife launched OneRoof, Inc. in 2006, which helps to provide internet access and employment skills for small communities in India and Mexico.

The same year, they founded the community development bank Beneficial State Bank to help deprived individuals and small businesses in the San Francisco area. The couple donated millions to their educational institutes, Yale and Stanford, especially for advanced energy solutions.

Steyer and Taylor own an environmentally minded cattle grazing operation near San Francisco to experiment with reducing greenhouse emissions in the farming industry. The couple understands their civic and moral duties, which compelled them to sign Bill Gates and Warren Buffet’s “Giving Pledge” in 2010.

Tom Steyer house

According to Forbes, the net worth of Tom Steyer is around $1.6 million, which makes him half as wealthy as Trump; however, he is still the richest among other presidential candidates.

Tom Steyer owns an 1800-acre cattle ranch and a San Francisco mansion with Golden Gate Bridge views. Billionaire hedge fund manager listed his longtime presidio heights home for $11 million, which he bought back in 1990.

Steyer and Taylor’s family added unique features to this great Trudor-style home according to the family’s needs while focusing on water and the outdoors. Later on, water scarcity made them move from their longtime living property into a seacliff home overlooking the Pacific.

This home is famous enough due to its prominent owner and unique outdoor features. The first step includes a living wall, vines around the garage, a waterfall fountain, and a koi pond. A little library free to add and borrow books, the intent to encourage reading with ideological agendas.

Professional career

Tom Steyer started his career at Morgan Stanley as an analyst and later joined Goldman Sachs as an associate in mergers. Being in acquisitions in the risk arbitrage division, he became famous for his aggressive investments.

He became a partner at the San Francisco-based equity firm named Hellman and Friedman. At the same time, Steyer founded the hedge fund Farallon Capital which he called for a group of islands near San Francisco that were famous for its shark-infested waters. He founded this company in 1986 and managed it for 26 years.

Mr. Steyer, a hedge fund business pioneer, had the expertise to create solid financial connections. His father was running a prestigious law firm, and his inlaw’s family’s banking ties immensely helped him in his financial business.

He built a reputation for making strategic bets for institutions, various foundations, and affluent individuals. Under the guidance of Steyer and due to the management of university endorsements, Farallon became one of the leading hedge funds.

However, the incredible success of hedge funds came with controversy as, in 2004, numerous students in York and several other universities protested for their school’s involvement in Farallon, which they considered alleged at that time.

Farallon Capital Management

His brother Jim told Forbes, “Tom is not into money. He is into achievement. He is into changing the world for the better.” Steyer worked on mergers and acquisitions for Morgan Stanley before joining Goldman Sachs.

In 1986, Steyer moved to San Francisco to work in private equity, which made him create Farallon Capital while growing it into one of the most profitable hedge funds in the United States.

He spent twenty-six years running Farallon while delivering double-digit annual returns for his investors; later, his focus diverted to the environment and politics. Steyer had made enough fortune and invested well in fossil fuels. Therefore, he sold his ownership to his partners while keeping a sizable portfolio share.

Steyer left Farallon Capital Management in 2012 and turned over power to former Goldman Sachs investment banker Andrew Spokes. People with direct knowledge of the matter believe Steyer has nothing to do with running Farallon Capital. However, the press secretary of Steyer’s campaign confirmed that Steyer works as a passive investor for Farallon investment funds.

He states, “Tom is a passive limited partner in Farallon investment funds but had no participation in management or control of Farallon, or any right of compensation from Farallon, other than the sale amount as he left it at the end of 2012.”

After two years in 2014, when he stepped down from his firm, the couple made up to $6 million from selling the investment in the Farallon Capital Partners funds. In 2017, while talking to Forbes, Steyer stated, “When we thought about investing, our rule was it’s important not to be greedy. We always tried to be honest, not take huge risks, and always understand our risks.”

Political career

After running Farallon well for over two decades, Steyer left the company and turned his attention to politics and other grave environmental issues. He was already a great supporter of the Democratic party and got more active in political causes.

He spent $74 million in contributions and expenditures on mid-term elections in 2014, making him a top political donor. Before working for Goldman Sachs in 1983, Steyer worked for the former Presidential campaign Vice President Walter Mondale. He worked with Robert Rubin, the future Treasury Secretary in the Clinton administration.

In 2008, he put efforts to end California’s winner-take-all electoral allotment; two years later, he played a vital role in defeating a state law for reducing greenhouse gas emissions. He financially supported several politicians, making him a highly influential figure in California politics.

Tom Steyer did not qualify for the Democratic primary debate; he posted weak poll numbers rather than spending huge on ads. His campaign favored equality and tried to dismiss the thinking that he was not only a wealthy executive running after the White House. Mr. Steyer has planned to spend $100 million of his fortune on his presidential bid.

Climate justice policies

In 2012, he left Farallon to enhance his business portfolio, as the business nature does not match with his activism as they involved fossil fuels. Next, he became the founding president of NextGen Climate, which predominantly deals with environmental issues.

His NextGen America Organization finances and promotes Democratic candidates with some particular climate agendas, a significantly stronger global alliance in the area. He put a 2.3 trillion dollar plan that includes the declaration of a national emergency on climate change during his first day as a president, creating millions of green jobs to protect low-income communities and re-entry into the Paris Climate Accords.

He even stated while talking to Vogue that we can not afford to continue to lie with the Republican Party and the President. He considers climate change, health care, immigration, and tax cuts a justice issue.

Steyer added that this government allows corporations to end up in the poorest communities with the least political power to refrain from it. According to him, the issue is not a theoretical fancy pant, elitist point; it is straight-up justice.

In addition, he made the NextGen Climate Action Committee which helped him to gain attention on the national political scene. He has other significant initiatives, such as the nonprofit Beneficial State Bank in Oakland, California, founded with his wife in 2007.

Campaign for the impeachment of Donald Trump

Tom Steyer gained a national profile after launching a campaign against Donald Trump, U.S. President, in 2017. He tried to put digital and television advertisements and online petitions alongside.

People thought he would seek the U.S. presidency; however, Mr. Steyer announced in January 2019 that he would not run. Although precisely six months later, he entered the race and even spent $100 million on his campaign.

He disappointed people with his performances in various primaries and conventions; he withdrew from the presidential race in February 2020. Later, he endorsed Joe Biden as the Democratic nominee who ultimately defeated Trump.

Among presidential candidates, his wealth and business are unique; he builds his political brand by funding the impeachment campaign. He gave the reason behind supporting the impeachment campaign is he accuses Trump of using the presidency to make money for himself, along with various other things.

Steyer called Donald Trump mentally unstable when he won the White House, and Tom Steyer launched a national ad campaign for Trump’s impeachment. He spent around $40 million on the initiatives.

Democratic politics

During the midterm elections in 2006, Steyer and Chris Lehane (former Clinton White House operative) held fundraising in San Francisco for the election campaign of U.S. Representative Nancy Pelosi.

Bill Clinton attended the campaign, and the following year, Mr. Steyer became the top donor to Hillary Clinton for the 2008 Democratic Presidential primaries. In 2004 and 2008, Tom Steyer served as a delegate to the Democratic national conventions.

Steyer has spent the decade putting the profits of his investment to gain political influence. Mr. Steyer is a well-known Obama supporter, which he portrayed at the 2012 Democratic National Convention, where he hosted the president at a fundraiser at his Bay area home. He spent around $65 million to back Democratic candidates and environmental causes.

California political activities

Tom Steyer has a significant prominence in California State politics, as his efforts in 2010 to defeat Proposition 23 in California, which was about delaying certain implementations of environmental policies.

It was the start of his public climate change activism. At the same time, he spent around $5 million to fight the ballot initiatives, which helped to put new limits on greenhouse gas emissions. It was a massive amount for this initiative, but he still helped with $700,000 from Bill Gates and $500,000 from billionaire hedge fund manager Julian Robertson.

Steyer backed a California ballot issue that helped to hike tobacco taxes passed in 2016. Meanwhile, only some of his favored candidates won the elections; however, it was the year that was not favorable at all for Steyer’s environmental election agenda.

Healthcare

Healthcare is a fundamental right; however, Tom Steyer did not support “Medicare for All.” He instead focused on expanding coverage by way of a public option, as he feels we can not change everything in society to drop the cost of healthcare for everyone.

He thinks every American has a right to affordable healthcare, making Americans choose for themselves.

General elections in 2016

During the 2016 elections, Tom Steyer topped all donors by spending $89,794,744, whereas the Center of responsive politics considered it a contribution to fund Liberals. His top issue at that time was progressive climate change. Climate change was the primary issue that needed to be reflected in polls, which was crucial for voters.

According to the report by the Energy and Environmental Legal Institute, Steyer funded the Democratic National Committee on climate change and renewable energy. He also donated millions to candidates to accept the global warming agenda and encouragement for state attorney generals to deal with the people who disagree with the environmental views.

Tom Steyer Campaign Finance

Steyer said he would reorganize the Federal Election Committee and try overturning the Supreme Court’s controversial Citizen United decision to undermine the corporate influence on politics.

2020 presidential elections

In November 2019, Tom Steyer’s presidential campaign was a privately offering campaign with contributions to local politicians in exchange for endorsements. The campaign did not follow through with any suggested donations, and after various politicians reported that to the media, Steyer’s campaign denied such things.

Taxes

Tom Steyer supported raising taxes on affluent Americans, although there are no specifics about it. He advocated canceling Republican tax cuts for corporations and the rich. He had thoughts to ensure society is not unbalanced and unfair and the wealthiest Americans are taking advantage of everybody else.

Under 2017 tax forms, Tom Steyer listed Farallon Credit SideCar Intermediate L.P. as one of his long-term investments. According to the filing, he took $1.7 million from this limited partnership for himself and his wife. They registered their fund’s details in the Cayman Islands, where the government does not impose income, corporate, or estate taxes.

After two years, in 2014, after two stepping down from the firm, the couple made up to $6 million from selling its investment in the Farallon Capital Partners fund. According to the tax returns, the Steyer family invested in the funds in January 2009 and took the assets back in December 2014.

Additionally, a filing from the SEC lists the funds as Farallon Capital Management that Spokes and other members as related persons. The Steyer couple listed Farallon Asia Special Situations Master on their 2014 filing fund with a $2 million loss.

Making money from fossil fuel

When Tom Steyer ran an investment firm, they invested in every part of the economy. At that time, he admitted that energy is fueling the economy in the United States and the world has enormous unintended consequences of climate change.

He took the Giving Pledge and gave the bulk of the money away. Steyer stated, “I started to organize to work against the climate crisis and work to resolve it. Suppose there is any part of it for some legal reason that I have been unable to deprive in my portfolio. I promised to give your charity all the money from it, and there is no conflict.”

He added, “What I am asking Americans to do the way I did. We all come from a fossil fuel economy. We need to realize that there is not something that we intend to have a bad consequence, but it does. We all need to change and do what I did: push as hard as possible towards green energy while addressing the climate crises.”

Philanthropy

Here we will guide you with some of the significant work of Tom Steyer as a philanthropist:

  • To overcome climate related-disasters
  • Funding during the election cycle
  • Funding in common sense media
  • Donations to their alma maters
  • Supporting global environmental change

To overcome climate related-disasters

Steyer and his wife are contributing a $2 million fund for victims of extreme weather events. The Climate Disaster Relief Fund, managed by the San Francisco Foundation, provides grants to organizations to serve the victims of climate-related disasters in the United States.

Climate-related disasters may include wildfires in numerous western states in 2013 that came out with other interconnected problems like floods, droughts, and oil spills. Steyer also committed to donating all the profits from the oil and gas company “Kinder Morgan.” to the wildfire effects.

Funding during the election cycle

San Francisco-based philanthropists also promised to spend $100 million during the election cycle 2014 in favor of Democrats who were committed to fighting global warming. Steyer stated, “Climate change is a defining issue of our generation, and we can no longer afford to address this real threat. Those affected by the wildfire in 2013 have felt the devastating impacts of climate change, and the Climate Disaster Relief Fund will help in recovery efforts, and we must act to prevent any future climate-related disasters.”

After signing Warren Buffet and Bill and Malinda Gates “Giving Pledge,” Steyer has played a vital role in designing an effective public policy. Steyer, as a prominent supporter of Democratic candidates, also joined former Secretary of State George P. Shultz to advocate successfully against Proposition 23.

It was about a California ballot measure financed by some concerned people to suspend clean energy standards in the state. Steyer and his wife Taylor contributed generously to several best causes, including OnePacificCoast Bank, a community development institution working in low-income neighborhoods.

Funding in common sense media

The couple contributed generously to Common Sense Media, a nonprofit group to help children and their parents navigate media and technology. The couple committed $15 million over five years, $15 million over five years to establish the Center for the Next Generation and become a forceful voice in public policy debates related to children’s issues and the environment.

Donations to their alma maters

Moreover, Tom Steyer’s wife and Steyer himself donated $40 million to Stanford University and $25 million to Yale University for separate energy research initiatives. Their philanthropic contributions made many people uncomfortable, but they continued to work to encourage the public to focus on some significant issues.

Politics pushes politicians, especially elected officials, to work on some short-term decision-making; however, we want someone to talk about social problems and should be futuristic enough to make investments that way.

The private philanthropic facility is TomKat Charitable Trust in San Francisco, in partnership with his wife. In 2008, the trust reported over $153 million as net assets; in 2009 its value exceeded $186 million.

In 2010 the value exceeded $203 million; in 2012, the trust had fallen back to $156 million, according to IRS disclosures. Grants in 2012 include $250,00 to environmental activist groups in general support.

Supporting global environmental change

They contributed $250,000 to the Aspen Global Change Institute to support its Energy Policy Project, a tax-exempt organized workshop for scientists to produce a variety of publications. Its mission is about scientific understanding of Earth systems and global environmental change.

The services of this philanthropic couple contributed $392,000 to the Center for Ecoliteracy. $2.5 million for the Clean Economy Network Educational Fund in general support with Advanced Energy Economy, a national association of business leaders who make the global energy system secure, clean, and affordable.

Additionally, $200,000 funding for the Energy Foundation is a partnership of philanthropic investors promoting clean energy technology with a new energy future by advancing energy efficiency and renewable energy.

Tom Steyer founded two environmental energy research institutions at Stanford University for Sustainable Energy and the Steyer-Taylor Center for Energy Policy and Finance. In 2007, Steyer founded the Beneficial State Bank and Foundation in favor of community development and underserved communities on the west coast.

The couple generously gave much of their fortune instead of leaving it for their children. Steyer co-founded Advanced Energy Economy to raise awareness of advanced energy’s public benefits and opportunities.

The Advanced Energy Economy board of directors includes former Obama Administration Environmental Protection Agency Administrator Lisa Jackson. In 20016, the Advanced Energy Economy board and the Environmental Protection Agency Administration coordinated to erode the energy crisis over a United States power grid regulation.

Conclusion

While seeking an answer, how did Tom Steyer make his money? One should know that Mr. Steyer has made millions through funds from Farallon Capital Management, the world’s most considerable funds, where he is still a passive investor.

Tom Steyer, the former hedge fund manager from California, is the first official billionaire who challenged America’s first billionaire commander-in-chief for the presidency. The environmentalist and former presidential candidate focused his fortune on charity and promised to donate much of his riches; he also spent hundreds of millions in politics.

Steyer has pledged to spend $100 million on the presidential campaign, which can impact the candidate race. He consistently spent more than any other candidates each week on social media while advertising which helped him earn 2 percent in multiple polls that made him qualify for the presidential debate.

Tom Steyer’s family contributed generously to numerous progressive causes, community development institutions to work for low-income and navigate media and technology, a forceful voice in public policy debates related to children’s issues and the environment, and funds for energy research initiatives.