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Investment Firm with Ties to Mills Under Fire

A coalition of national and student organizations, from over 60
colleges and universities, is targeting an investment company Mills
College is invested in for being environmentally and socially

National and student organizations are hoping to pressure
Farallon Capital Management, LLC, where Mills College has had up to
19 percent of its endowment invested, to disclose all of their
investments, some of which have been questionable in the past.
Unlike investing in public stocks and bonds, which the Securities
Exchange Commission oversees, Farallon mostly invests in
privately-held companies and does not have to disclose most of
their investments.

The coalition’s Web site,, started by
students from Yale, says they are “seeking to make private capital
more socially and environmentally responsible. As universities and
colleges turn increasingly to non-public investments…stakeholders
like us have been calling for increased disclosure of these
investments.” The coalition is targeting Farallon since 40 percent
of their investment is money from universities and other tax-exempt

In 1986, Thomas F. Steyer and Matthew Barger founded San
Francisco-based Farallon with start-up capital provided by Hellman
and Friedman, a firm co-founded by a former Chairman of Mills’
Board of Trustees, Warren Hellman. Today, Farallon manages over
$9.8 billion, making them the fourth largest private investment
fund in the world.

According to company Web sites, Barger, who started at Hellman
and Friedman in 1984, is now Deputy Chairman of Hellman &
Friedman. Steyer, the senior managing member of Farallon overseeing
all of their investment activities, is also a managing director at
Hellman and Friedman.

There are many ties between Mills, Hellman, and Farallon. From
1985 until 1992 Hellman served as chair of Mills’ Board of
Trustees. According to Mills Quarterly, Spring 2004, “at least ten
[of Hellman’s] family members have attended Mills, and five have
served as trustees.” Hellman’s daughter-in-law Sabrina Hellman
recently began a three-year term on the Board of Trustees.

Former trustees Kathryn Hall and Georgia Lee are also associated
with Farallon and Hellman and Friedman. Hall chaired Mills’
Investment Committee from 1997-2001, and has also worked for both
Hellman and Friedman and Farallon. Hall also co-founded HFS
Management Partners, a predecessor to Farallon Capital

Lee was Vice Chairman for the Board of Trustees from 1997 to
2001, then also working for Hellman and Friedman where she
continues today as a managing director and the Chief Financial

According to the National Association of College and University
Business Offices 2003 Endowment Study, Mills College invests 19.6
percent of its endowment in Farallon Capital Management, LLC. The
endowment has a market value of about $155.5 million as of the end
of June 2004 according to the college, equaling about $30.478
million invested in Farallon.

But College Treasurer Elizabeth Burwell said, “The 2003 NACUBO
information is now out of date… funds move up and down as the
markets change, the college draws down income from funds to meet
financial goals, [and] funds are moved between asset classes to
balance the portfolio,” Burwell said. She could not provide
specific numbers on how much the college currently invests in
Farallon before press time, but said it’s probably around 15
percent of the endowment. Mills has been invested in Farallon since
the late 1980s, according to Burwell.

The “Unfair”allon Campaign all started when students at Yale
found out, by digging through tax forms, that their school was
investing with Farallon in projects hurting a “whole areas
ecosystem,” including Baca Ranch in Colorado, according to Maris
Zivarts, a Yale grad student and part of the Unfarallon

Because Farallon is a private investment fund, also known as a
hedge fund, it is not required to register their private
investments under the federal securities laws, and is not even
required to disclose their investments to investors like Mills.

According to the San Jose Mercury News, Farallon also invested
in land to build a luxury golf course in San Martin, near San

Environmental groups protested the land use since it was home to
two endangered species, the tiger salamander and the western pond
turtle. In 1996, Farallon agreed with the city and Santa Clara
County to construct habitats for these species and allow public
access to the golf course in exchange for permission to build the
luxury course.

“It wasn’t until we connected Yale’s name to the scandal, that
Farallon and Yale agreed to sell the property to a nature
conservancy,” Zivarts said. “Since then, we’ve dug deeper and now
know that several of Farallon’s investments are of social or
environmental concern, and are definitely not the type of
investments that most university students would like to see their
school involved in.”

In 1999, Cordevalle Golf Club and Resort opened. By 2002, the
county’s planning commission discovered Cordevalle failed to build
the habitats and was not allowing public access to the golf course,
instead offering $250,000 invitation-only individual

Other private investments criticized by the coalition include
Farallon’s investment in Halliburton, a company profiting from the
war in Iraq, as well as other questionable investments in
Indonesia, Argentina, and Russia. As recently as December 2003,
Farallon held 140,000 shares in Halliburton, worth a total of
$3,640,000 at the time of reporting.

In response, a Farallon spokesperson said, “we are not going to
go beyond what we have already said publicly.” In an e-mail to
coalition students on March 17, 2004, Steyer said, “I appreciate
that you or others may have different ideas about economics and
business. We do believe that our role in allocating capital
contributes to economic growth in communities around the world,
which in turn improves long-term social and environmental

Asked whether Mills has any advisory committees on investor
responsibility, economics professor David Roland-Holst, who
oversees the Investment Committee, said, “as a faculty observer on
this committee, I can’t speak publicly about its policies or

According to Burwell, the Investment Committee invests “in funds
that will provide the college with the best return…It is
necessary since our endowment payout is about 23 percent of our
total revenue at Mills.” According to Burwell, “it would be
difficult [to have guidelines for investor responsibility] since we
don’t all agree on what socially responsible is.” But, she said,
“the college would not invest in something that was not legal or
ethical…we say, what’s best for the college, what’s the right
thing to do.”

This is not the first time an investment by Mills has been
targeted by students for being socially irresponsible. From the
mid-1980s through the early 1990s, and during the time Hellman was
Chairman of the Board of Trustees, Mills students and faculty
members marched, held sit-ins, signed petitions, and built and
camped out in mock shanty towns, protesting the continued
investment of millions of dollars in South Africa during apartheid.
In 1984 The Weekly reported Mills had over $3 million in stocks
invested in companies with direct investment in South Africa in
1984, and over $4 million by 1987.

The trustees repeatedly voted against divesting despite the
protests. The board said they had more power, by keeping their
money in the investments, to pressure companies to help end
apartheid. The Weekly reported that Hellman wrote in a Jan. 1986
letter to the Mills community, that the board’s decision not to
divest was based on moral responsibility, and not on financial

In May of 1987, amid continued protests, the board decided that
they would give the companies they invested in three years to cut
ties with South Africa.

The same month the divestment issue was to be revisited, May
1991, Hellman, and then-college president Mary Metz, announced the
college was to become co-ed. Though the decision was reversed by
the end of the month, it delayed the final vote on divestment from
South Africa.

The board finally voted in August 1991. According to Burwell,
“At the time there were not a lot of investments that had nothing
to do with South Africa…it was the right thing to do, but took a
couple of years to move the money.” Mills completed their
divestment by December 1991, years after other institutions such as
U.C. Berkeley and the Cities of Oakland, Berkeley and San Francisco
had divested from South Africa.