Farallon Capital Pulls Money From Controversial Private Prison

Mar 10 2006 | 12:00am ET

Hedge fund Farallon Capital Management, which has received unwanted attention in recent months because of its investments in a private prison operator, has sold two-thirds of its stock in those facilities, according to the Graduate Employees and Students Organization, which conducted an analysis of public filings.

The organization, which has been active on the Yale University campus but is not officially recognized by the Ivy League school, has been lobbying for the university to divest in any firm or company that invests in private prisons, which activists allege systematically commit human rights abuses.

According to the study released Tuesday by GESO, Yale’s holdings—via hedge fund Farallon Capital—in Corrections Corporation of America decreased from $1.5 million to approximately $500,000 in the fourth quarter of last year. Evan Cobb, a spokesman for GESO, said, “I think [the hedge fund’s divestment] has a lot to do with the fact that there is broad-based support on our campus and at campuses across the country to divest in prisons.”

Farallon declined to comment on its investments, but according to source close to the firm, the investment was made in March 2004 when the CCA stock traded in the mid-$30-range, and the hedge fund sold about 70% of their shares in the prison operator in December 2005 when CCA shares were valued in the mid-$40-range.

Tom Conroy, a spokesman for Yale, said the university has not made any policy decisions to divest in the private prison industry, and he declined to comment further on the schools investments, citing university policy. “The only decision we have made this year to divest in anything is in regards to Sudan,” he said.

Last month, Yale announced that it would bar any investments made by the university’s endowment in companies doing business with Sudan because of the government-sponsored genocide there.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...