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Nicolas Giauque

lines on the record: 23
first: 2026-04-22
most recent: 2026-04-22
sittings or episodes: 1
sources: podcast

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“Oh, I think the most exciting thing is this AI revolution that's coming upon us. It's going to change every single industry the way we organize our firms. It's a unique and incredible time to be an investor. Our whole portfolio is designed so that we are not leaning into the fate of the moment, but we are absolutely recognizing that this will impact our credit business, certainly our long short business and our firm, and staying close to those developments, implementing them internally, and how they impact every single one of our investment is probably the single most exciting areas in the world right now.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“I'm a very boring family man. But now that we are actually empty nesters with my wife, there's a little bit more time. But I live in San Francisco. I think Farrell On the differentiating characteristics is that it was built in San Francisco to be in a different place than New York so that we could be contrarian in our investment approach and we could make decisions without the wisdom of the crowds around us to some extent and the greater benefit of the San Francisco and the Bay Areas, you see outdoors are absolutely fantastic, so I enjoy mountain biking and hiking.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Life is a marathon, it's not a sprint. And it's a powerful statement because it means also that when things don't work out, well, this investment does not define your career as an investor, this particular event in life does not define the rest of your life. But at the same time, it's perpetual effort, always pushing yourself, it's a marathon, you got to train for it, you've got to work on it every day, you got to persevere. And what's incredible about that statement as well is that you can achieve so much over long periods of time.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think I'm a self-aware, paranoid optimist. So maybe that's three strengths which have got their own weaknesses. I think if you're going to invest well, you've got to know your own biases. I certainly like to lean into market dislocations, and I tend to do that too early. And I correct myself. I think you've got to be an optimist ultimately. It's true. Optimists win over the long term. But you've got to be paranoid because there's more ways to lose money than can be ascertained that first instance. So always putting yourself back, challenging yourself in the hypothesis. And I think that feeds in well with when I talk about our three pillars of our culture of humility. You're always constantly reassessing yourself.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“I think it goes back to the fundamentals of our extrusive mission is generating returns for ILPs, yes. And we put our LPs first in everything that we do. And when we talk about our culture of integrity, that's also putting them first and also our desire to do the right thing by our partners is because we also represent them in what we do. And we're very honored by the cast of LPs that have decided to invest with us.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Really, it's about being prepared right now. I think this is going to be a long cycle, and one of the key factors around private credit is indeed that these structures were designed not to be traded. So there is some trading that's taking place right now, but I think the opportunities that are going to be around actual defaults that are going to be ahead of us and then refinancings of those balance sheets when they mature. And so for me, the private credit opportunity with regards to direct lending and how we can lean into that is really going to be a 27 and beyond opportunity in terms of meaningful capital deployment. But those disruptions that come from AI's involvement in SaaS, but in also in asset-like businesses, will have meaningful impact on those portfolios, and there will be many winners, and there will be many losers, and our interest is going to be in providing solutions to the ones that have done less well.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Much more when there's an incredible transformation that's going to affect all of our industries from the rollout of AI. And I do think that the concerns over the future losses on software related asset-like businesses that have been heavily levered and favored by private equity and are perhaps disproportionately represented in private credit versus public high yield credit will create greater losses in the private credit world. But I think it's a question of quantum, and I do not expect there to be a systematic risk associated with this, but there will be greater opportunities going forward for investors.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Well, actually, we're talking about 2008, so private credit came out of that. Yes, it was the solution to the systematic risks that affected all the banks. We're going to put credit risk in areas which are loss-absorbing without creating systematic risk. And I think the regulator has been very successful in view of the growth of private credit, especially around direct lending and structured assets. It's taken the risks off the banks. It's put them in the hands of investors who have the ability to absorb capital. Unfortunately, it is possible that we're entering a phase where there'll be more need for that loss-absorbing portion of the capital. I think the growth will undeniably continue. I also think that the biggest problem, perhaps with the asset class, is just that there is always a credit cycle, and we have not really had a credit cycle for a long while now. And we've seen a rise in liability management exercises and restructurings, but it would certainly go up significantly in a recession, and it's likely to go up.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Think we are really trying to add value in our alpha and our DNA is to add value in idiosyncratic risk is will that company decide to sell itself in Japan or not? Will this drug be successful or not? Will this restructuring go our way or not? That's the way we're going to add value irrespective of geopolitical risk. We are geopolitically aware, of course, as we are now macroeconomically aware after 2008. And so this is a key component of our portfolio construction and our portfolio hedges, but what our LPs expect of us is to preserve capital during the periods of volatilities, but really generate returns from idiosyncratic risk, not betting on those investments. And so we're managing the volatility and trying to understand what is going on and how it can impact short-term movements, but really our portfolio is fundamentally structured to look through those events.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Of major arbitrage deals, but you're really picking the best ones as part of a bigger book where you're diversifying risk elsewhere, very accretive to returns we expect.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“We encourage you to go all in, as I know you are, and so it's a very attractive period with the very good risk rewards on the large transactions that have been announced. And it's a business which is very good to do selectively. Larger deals tend to have wider spreads and to do it as part of a multi-strategy effort where you're not running a diversified”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Companies to help them generate value for shareholders and ultimately for society at large. We are very excited about in our long short book and our event driven investing in biotech stocks in particular. This is an area where there's just an incredible amount of innovation still taking place in this country. And it's an area which really fits well our mode of thinking in terms of probabilities of outcome and our ability to combine both science and investing together. We're looking for really good investments but with great and depth of scientific research. So that depth is working for us. And then thirdly, I think our initial strategies of merger arbitrage that I've mentioned has really seen a new light of day effectively in the recent years with a much easier regulatory path to approval of deals and probably a very short window for corporations to do strategically transformative deal. I think your firm is at the forefront of supporting that.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“There's probably multiple parts that I still find attractive right now. So I mentioned our core strategies within our long, short exposures. There's certainly two areas in particular that are particularly attractive right now. Japan is a place that we've been investing in for a very long time or 15 years by now. And there's been a dramatic change in how corporations are supposed to behave now. So that transition in corporate governance has really opened a whole avenue for us to deploy capital. It's a place where you need legitimacy, that you need to play by the local code, I think, to be successful. But there are multiple areas where you can invest in corporations and help them generate value for shareholders. And it's a unique time in Japanese society where the government, the stock exchange, the ministries are all supportive of this constructive engagement. So that's a core area of focus, investing in equities, in constructive engagement with”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“I think 2008 was certainly a difficult period for us in fall of our peer group, and there are certainly times when the markets can be crazier than you would have ever expected. And that typically happens in periods of deep stress in liquidity and availability and systematic risk, effectively, across the globe. So those definitely test us and test markets, typically, thankfully in the more recent past, we've always had negative outcomes, but negative outcomes that were understood before the fact ex ante and then we're prepared for those.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Well, the DNA of the firm was merger arbitrage, and merger arbitrage investing is in a way very simple. You can very easily determine your downside, which tends to be the pre-deal price, and your upside, which is a deal price. And it forces you to think in probabilistic terms, what is the implied market probability that I get from just looking at prices? And then what do I expect that probability to actually be based on my research? And so that format is what has driven our entire investment construct. It's all about thinking about the world in probabilistic terms. An investment thesis is not a religion. It should be provable wrong. You need to put yourself, if you haven't figured out how you can lose money, then you haven't thought long enough. Think about the post-mortem after the fact. How could you have lost money and visage that think back through it? That's a scenario. Put a probability on that. And all of our investments have these different probabilities. And we are...”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Having lower leverage but tolerating higher geocratic risk on an individual positions. And at the same time, I hope and expect that we're much more collaborative atmosphere for the small number of partners that work together. And so the greatest opportunities tend to fall between the cracks of the credit and the long short and the real estate teams and the global teams. And so that's a key differentiating strength of ours to deploy capital successfully. So if I go back to where we started, The firm was founded in 1986. Down here along that path, what is a governing philosophy around Balancing risk taking with risk”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's a very interesting question. I think when we started off, in a way Fairland was one of the pioneers of the multi-strategy model, but it was a single manager multi-strategy model. What's evolved over the time is just having these multi-managers within the multi-strategy. And so the way we're different is that we're one partnership run with a one P&L mentality. All the partners are mostly interested about how well the firm does as a whole, and that allows us the ability to redeploy capital quickly. In terms of our portfolio, it means that we have a substantially more concentrated portfolio. I think we're running at Fairlawn, probably less positions than most multi-managers have pods, investment teams. So it's substantially more concentrated, and we take more idiosyncratic risk in that fashion. But we can do it with substantially less leverage than the multi-managers. And so we control risk in a statistical and precise fashion as well, but more fundamentally by”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“So, I think the great strength of Farallon is our ability to cover multiple strategies in multiple geographies and see it from a step away. And that gives us the ability to do the right allocation. So we're involved in merger arbitrage. So these are announced deals, whether it's typically a spread, we're taking on the one hand the risk that the deal does not happen. So process risk, but at the same time we're also providing this liquidity to target shareholders. So there's a natural, typically alpha to be generated from the strategy. We invest in risk arbitrage strategy, so this is also where we're long and short typically the same asset, but where the event that will crystallize the collapse of value is not a merger. We invest in various credit strategies, corporate and non-corporate across the globe, and then we do long short investing. And then finally, we have some real estate strategies as well. Let's talk about”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“And the technology has really changed, yes. I think 25 years ago, when there was a merger deal, I would draw circles on a map about which shops needed to be closed or not. Now we have data scientists that are providing support to our investment professionals. We are rolling out AI tools to help them in their investment analysis.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“To reallocate capital across strategy has been the fifth key differentiating factor in generating returns. What's really changed over time since I joined 30 years ago has been becoming global. When I was hired, I was employee number two of the international offices. We started off in London and since then we have a thriving business in Japan, in non-Japan Asia with offices in Hong Kong and Singapore, in Latin America as well. taking the strategies that we had thought through and developed in the US, bring them internationally, changing them, and that feeding back into our overall investment framework is what has really changed. At the same time, of course, we've also very deeply evolved our risk culture. We came from the old world of hedge fund investing. The rule number one is don't lose money. Rule number two, remember rule number one. You've heard this one before, I bet. And that's still very much true, but at the same time, there needs to be a risk infrastructure when the funds are larger. There's multiple strategies. And so we've gone very deep in evolving that.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Think we've defined what we're good at, and our way of value added is really focused on four main blocks. The first one is that we have a deep knowledge of corporate events, and that can be in distress restructuring, that can be in merger arbitrage. We always seek to provide liquidity where liquidity is scarce, and that can be in a disruption from a takeover where target shareholders might not want to receive the consideration that's being offered to them, and it can be in more macroeconomic driven disruptions, like in 2008, like in Solving Euro crisis. We also try to take a longer term in our investment horizon, and that's particularly relevant in long short equities, and we want to be a trusted counterparty and a trusted advisor to our counterparties in the street, but also to our borrowers or the people that we invest with. And that becoming a trusted advisor can allow us to generate better returns. So that has been consistency. We've added multiple strategies, and so over time, the ability”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Our focus has been 40 years now with just one mission, just extraordinary risk adjusted returns. So I think this intense focus on just this one simple mission is what has gotten us through all those 40 years with the performance that we've had. We certainly are very focused on generating performance, but also focused on capital preservation. We know the role that we fit in our investors' portfolio. And so I think that mission, a strong culture which is based on excellence, integrity, and humility has also allowed us to achieve this with multiple CIOs. I'm now the third CIO and managing partner of the firm, so we've been able to do this consistently over time.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT
“Our initial strategies of merger arbitrage that I've mentioned has really seen a new light of day effectively in the recent years with a much easier regulatory path to approval of deals and probably a very short window for corporations to do strategically transformative deals.”
2026-04-22 · Goldman Sachs Exchanges · Farallon Capital's Nicolas Giauque on Investing for the Long Term · IDENTIFIED FROM THE TRANSCRIPT