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Tom Steyer. Photo: Steve Pope/Getty Images

Tom Steyer, who launched his presidential campaign on Tuesday, was early to the hedge fund game.

The state of play: In general, there are two ways to become a billionaire hedge-fund manager. The first is to be a pirate — raid the Bank of England, bet on a housing collapse, that kind of thing. The returns on those bets can be so enormous, you can make billions even off a relatively small asset base.

Quick take: Steyer founded Farallon Capital in 1986, and excelled on three main fronts:

  1. A protégé of Bob Rubin's at Goldman Sachs, Steyer was an expert at risk-adjusting potential returns. He's one of the few hedge fund managers who actually spent most of his time constructing sophisticated hedges, making sure he got the returns he wanted without taking risks he didn't want to take and without using undue leverage.
  2. As one of the earliest proponents of "absolute return" investing, Steyer had a bond investor's terror of losses. Return of capital was always more important than return on capital. That made him very attractive to conservative institutional investors.
  3. Hailing from New York's Upper East Side, Steyer had all the elite connections he needed to be successful: His father was a partner at Sullivan & Cromwell, and his resumé segued seamlessly from the Buckley School through Exeter, Yale (summa cum laude and Phi Beta Kappa), Stanford Business School and Goldman Sachs. He also married into money: His wife, Kat Taylor, is the granddaughter of a San Francisco banking magnate.

Between the lines: Steyer was the kind of hedge-fund billionaire who was quieter, and didn't make big audacious bets. But he was able to promise conservative institutional investors predictably good returns, in both bull and bear markets. That helped him amass a huge asset base.

  • Good returns on $30 billion of assets will ultimately make you just as rich as spectacular returns on $3 billion of assets.

The impact: Steyer left Farallon Capital at the end of 2012, and one of his greatest successes is that it's still a Top-20 hedge fund 7 years later. Steyer wasn't some lightning-in-a-bottle individual genius. Rather, he managed to build an institution that would outlast him.

Editor's note: Tom Steyer left Farallon at the end of 2012, not 2013, as was previously written.

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Illustration: Aïda Amer/Axios

Domestic extremists are using obscure and private corners of the internet to plot new attacks ahead of Inauguration Day. Their plans are also hidden in plain sight, buried in podcasts and online video platforms.

Why it matters: Because law enforcement was caught flat-footed during last week's Capitol siege, researchers and intelligence agencies are paying more attention to online threats that could turn into real-world violence.

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When the coronavirus lockdowns started in March, kidstech firm SuperAwesome found that screen time was up 50%. Nearly a year later, that percentage hasn't budged, according to new figures from the firm.

Why it matters: For most parents, pre-pandemic expectations around screen time are no longer realistic. The concern now has shifted from the number of hours in front of screens to the quality of screen time.

In photos: D.C. and U.S. states on alert for pre-inauguration violence

National Guard troops stand behind security fencing with the dome of the U.S. Capitol Building behind them, on Jan. 16. Photo: Kent Nishimura / Los Angeles Times via Getty Images

Security has been stepped up in Washington, D.C., and state capitols across the U.S. as authorities brace for potential violence this weekend.

Driving the news: Following the Jan. 6 insurrection at the U.S. Capitol by some supporters of President Trump, the FBI has said there could be armed protests in D.C. and in all 50 state capitols in the run-up to President-elect Joe Biden's inauguration Wednesday.