Description
The firm was founded by David E. Shaw, a former Columbia University faculty member and has more than 1,200 employees worldwide. The focus of its activities is "the intersection between technology and finance,"[citation needed] and it applies quantitative and qualitative trading strategies to hedge fund management and other investments, including venture capital, real estate, and private equity.
In August 1996, Fortune described the firm as "perhaps the most intriguing and mysterious force on Wall Street". Over the following decade, Shaw grew to manage nearly $40 billion in aggregate capital and was once among the world's largest hedge funds as measured by assets under management.[2] In mid-2011 its core hedge funds had approximately $15 billion dollars in investment capital. [3]"Wall Street's King Quant David Shaw's Secret Formulas Pile Up Money. Now He Wants a Piece of the Net.", February 5, 1996, Fortune magazine</ref>[3]
The D. E. Shaw group has made a conscious effort to build a carefully selected team of extraordinarily gifted professionals, each among the very best in his or her profession, rather than a larger group of highly competent but less obviously remarkable personnel. To this end, the firm continues to allocate an unusually large portion of its operating budget to the identification and recruitment of truly exceptional individuals who might significantly add to its capabilities. Hiring is extremely selective, with only one candidate in several hundred ultimately invited to join the firm. The company's personnel includes a number of Rhodes, Fulbright, and Marshall Scholars, Putnam Fellows, and the winners of more than 20 medals in the International Math Olympiad. It maintains offices in Europe, North America, Asia and the Middle East.[3]
D. E. Shaw supports educational programs such as Math-M-Addicts (teachers are D. E. Shaw & Co. employees),[citation needed]American Regions Mathematics League[4] Worldwide Online Olympiad Training (WOOT), United States of America Mathematics Olympiad and theInternational Mathematics Olympiad, Mathematical Olympiad Program, the MIT 6.370 Battlecode Competition,[5] and The Center for Excellence in Education[6]
[edit]History
In 1997, the firm returned capital to most of its early investors in favor of a structured credit facility of nearly $2 billion from Bank of America, with terms that allowed Shaw to keep a higher fraction of profits than hedge fund investors normally allow.[citation needed]After the Russian debt default in 1998, Shaw, like Long-Term Capital Management (LTCM) and many other hedge funds, suffered significant losses in its fixed-income trading.[citation needed]Shaw suffered a couple of lean years thereafter, but attracted new investors as its investment performance recovered.[citation needed]
Many of D. E. Shaw's headline-making transactions are related to investments in real estate, wind power, and bankrupt companies with valuable assets.[citation needed] In December 2003, a subsidiary of one of the D. E. Shaw group funds acquired the toy store FAO Schwarz, which reopened for business in New York and Las Vegas in the fall of 2004. In the same year, D. E. Shaw affiliate Laminar Portfolios acquired the online assets of KB Toys, which continued operating as eToys.com.[7] In August 2004, D. E. Shaw along with MIC Capital, proposed to inject $50M into the bankrupt WCI Steel. In December 2004, Shaw bought 6.6% of USG Corp, a wallboard manufacturer seeking bankruptcy protection as a result of rising asbestos liabilities.
In 2006, Lawrence Summers became managing director at D.E. Shaw until 2008, receiving at least $5.2 million in compensation during that period, according to a 2009 report.[8][9] [10]
In addition to its financial businesses, the D. E. Shaw group has provided private equity capital to technology-related business ventures, including Juno Online Services, an Internet access provider.[citation needed]
In 2007, David Shaw sold a 20% minority stake in the Shaw group to Lehman Brothers, as part of a broader strategy to diversify his own holdings.[citation needed]
Early in 2010 D.E. Shaw set up its Portfolio Acquisitions Unit, the aim of which was to acquire illiquid assets from rival hedge funds.[11]
[edit]References
- ^ "DE Shaw: Jumping more aggressively into private equity?"
- ^ "Hedge Fund 100 Ranking"
- ^ a b c The D. E. Shaw group - Who We Are
- ^ ARML website
- ^ MIT Battlecode website
- ^ [1]
- ^ "D.E. Shaw Affiliate Acquires Online Assets of KB Toys" MultiChannelMerchant, May 14, 2004.
- ^ "The Summers Bubble" by Kevin Connor and Matthew Skomarovsky of the Public Accountability Initiative, The American Prospect, November 17, 2008. Retrieved 4/5/09.
- ^ http://www.marketwatch.com/news/story/Lawrence-H-Summers-Head-National/story.aspx?guid={2E6ED23A-1B64-47B3-8C80-172BC59C60C4}
- ^ "Hedge Fund Paid Summers $5.2 Million in Past Year" by John D. McKinnon and F. W. Farnum, wsj.online, April 4, 2009. Retrieved 4/5/09.
- ^ Opalesque (9 February 2010). "D.E. Shaw sets up new unit to acquire assets from rivals".
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