Thomas Steyer's Farallon Capital Updates Positions in FreightCar America (RAIL) & Capitalsource (CSE) ~ market folly

Tuesday, March 31, 2009

Thomas Steyer's Farallon Capital Updates Positions in FreightCar America (RAIL) & Capitalsource (CSE)

In a new 13G filing made due to activity on March 19th, 2009, Thomas Steyer's Farallon Capital Management has disclosed a 6.2% ownership stake in FreightCar America (RAIL) with an aggregate amount of shares beneficially owned of 734,883. This is up from the 542,115 shares they owned as of December 31st, 2008 (disclosed in their 13F filing). So, Farallon has definitely been steadily increasing their position in this name. Stay tuned because on Wednesday (4/1) we'll be examining Farallon's entire portfolio as detailed in their most recent 13F filing. In the mean time, you can check out some of the other prominent hedge fund portfolios we've covered in our portfolio tracking series.

In other activity, Farallon also has filed an amended 13D on Capitalsource (CSE), disclosing a 10.7% ownership stake with 32,445,905 shares as an aggregate amount beneficially owned. This filing was made due to activity on March 23, 2009. This is a decrease in their position, as they previously owned 42,270,274 shares back on December 31st, 2008.

Background info on Farallon: Steyer founded the firm in 1986 and still manages it today. Steyer graduated from Summa Cum Laude from Yale University and received his MBA from Stanford's Graduate School of Business. Prior to founding Farallon, Steyer worked as an analyst in Morgan Stanley's Mergers & Acquisitions department and then as an associate in the risk arbitrage department of Goldman Sachs. Being so well versed in the area of risk arbitrage, Steyer employs similar strategies at Farallon. Farallon invests in both public and private debt, equities, private investments, and real estate.

For the year of 2008, Farallon was ranked 3rd in Alpha's hedge fund rankings. Farallon is a $30 billion firm and had suspended withdrawals from their largest fund after receiving redemption requests for around 25% of the fund's capital. The fund won't be charging typical management and performance fees, but instead will charge accounting fees. Some of Farallon's portfolio performance is available here and you can also read one of their investor letters from last year. In terms of more recent activity, we had noted in early February that Farallon had sold out of numerous positions (via 13D and 13G filings).

Taken from Google Finance,

FreightCar America is "a manufacturer of aluminum-bodied railcars in North America, based on the number of railcars delivered. The Company specializes in the production of aluminum-bodied coal-carrying railcars, with a range of railcar types, including aluminum-bodied and steel-bodied railcars."

Capitalsource is "a commercial lender that provides financial products to middle market businesses. Through its wholly owned subsidiary, CapitalSource Bank, the Company provides depository products and services in southern and central California."

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