D. E. Shaw & Co.

D E Shaw & Co, LP
Limited partnership
Industry Investment management
Founded 1988 (1988)
Headquarters 1166 Avenue of the Americas, New York City, New York, U.S.
Key people
 David E. Shaw
Products Hedge fund, private equity
AUM US$40 billion (as of 2016)[1]
Number of employees
 1300+
Website www.deshaw.com

D. E. Shaw & Co., L.P. is a global investment management firm founded in 1988 by David E. Shaw and based in New York City.[2] The firm has offices in New York, Hong Kong, Hyderabad, Shanghai, London and Bermuda. The company has made investments in technology, wind power, real estate, and financial services firms. Subsidiaries of the company acquired the toy store FAO Schwarz and eToys.com.

History

The firm was founded by David E. Shaw, a former Columbia University faculty member, and has more than 1,300 employees.[3] David Shaw directed the company from 1988 to 2001. In 2002, David Shaw removed himself from day to day involvement in the firm, and transitioned leadership to a team of six managing directors: Anne Dinning, Julius Gaudio, Louis Salkind, Stuart Steckler, Max Stone and Eric Wepsic.[4] The firm's management structure of the same six-member executive committee remained intact through 2010.[3][5]

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 D.E. Shaw & Co. to keep a higher fraction of profits than hedge fund investors normally allow.[6] After the Russian debt default in 1998, the company suffered losses in its fixed-income trading.[7]

In December 2003, a subsidiary of one of the company's 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.[8] In August 2004, D. E. Shaw & Co., along with MIC Capital, proposed to inject $50M into the bankrupt WCI Steel. In December 2004, D.E. Shaw & Co. bought 6.6% of USG Corp, a wallboard manufacturer seeking bankruptcy protection as a result of rising asbestos liabilities.[9]

In 2006, Lawrence Summers became managing director at D.E. Shaw & Co. and left in 2008, receiving $5.2 million in compensation for that period.[10] In late 2009 during the Financial Crisis it was reported that D.E. Shaw & Co. had set up a Portfolio Acquisitions Unit, the aim of which was to acquire illiquid assets from rival hedge funds.[11]

D.E. Shaw entered the Indian market in 2006,[12] with Anil Chawla, then the CEO of GE-Commercial finance, India & South East Asia, as the Country Manager. The India operations are headquartered in Hyderabad, Telangana. Under Anil Chawla as the CEO for India, D.E. Shaw entered into several large private equity deals in the country. This included the setting up of a joint-venture company with India's largest private sector company Reliance Industries [13] to provide financial services; real estate company DLF Assets Limited; publishing group Amar Ujala Publications; animation company, Crest Communications and renewable energy company, Soham Energy. After stepping down as CEO of D.E.Shaw in 2012, Anil Chawla continued as an advisor to the company until 2014.

In 2007, David Shaw sold a 20% minority stake to Lehman Brothers, as part of a broader strategy to diversify his personal holdings.[14] At the time of its bankruptcy in September 2008, Lehman Brothers Holdings Inc. had holdings in D.E. Shaw & Co.[15]

Investment strategy

The company manages a variety of investment funds[16] that make extensive use of quantitative methods and proprietary computational technology to support fundamental research in the management of its investments.[3][17][18] The Company also uses qualitative analysis to make private equity investments in technology, wind power, real estate, and financial services firms and in distressed company financing.[4] In addition to its financial businesses, D. E. Shaw & Co. has provided private equity capital to technology-related business ventures, including Juno Online Services, an Internet access provider, and Farsight, an online financial services platform that was acquired by Merrill Lynch.[19] The company has $40 billion in aggregate capital[20][21] and in 2011 had $15.6 billion in hedge fund assets under management and was ranked as the 21st largest hedge fund by Institutional Investor.[20][22][23]

Corporate responsibility

D. E. Shaw supports educational programs such as Math-M-Addicts (teachers are D. E. Shaw & Co. employees),[24] American Regions Mathematics League,[25] Worldwide Online Olympiad Training (WOOT), United States of America Mathematics Olympiad and the International Mathematics Olympiad, Mathematical Olympiad Program, the MIT 6.370 Battlecode Competition,[26] and The Center for Excellence in Education.[27]

Offices

See also

References

  1. ↑ Doom, Justin. (2014-02-18) Shaw Joins KKR Buying Cleaner Energy Rivals Won’t Touch. Bloomberg. Retrieved on 2014-04-04.
  2. ↑ Mackintoshin, James (April 30, 2007). "DE Shaw considers new private equity fund". Financial Times.
  3. 1 2 3 Jones, Sam (28 September 2010). "DE Shaw cuts 10% of workforce". Financial Times.
  4. 1 2 "Power of Six: Profile of D.E. Shaw & Co." (PDF). Alpha Magazine. 2009.
  5. ↑ "Rebounding from Near Death - World’s Largest Hedge Funds Have Their Sights Firmly On Institutional Dollars". Institutional Investor, Inc. May 2010.
  6. ↑ Derivatives Strategy (February 1998). "Inside D. E. Shaw". Derivatives Strategy Magazine. Archived from the original on 22 October 2013. Retrieved 8 June 2013.
  7. ↑ The Battle for Wall Street: Behind the Lines in the Struggle that Pushed an Industry into Turmoil, Richard Goldberg Pub. John Wiley & Sons, 2009
  8. ↑ "D.E. Shaw Affiliate Acquires Online Assets of KB Toys" MultiChannelMerchant, May 14, 2004.
  9. ↑ http://www.buyandhold.com/StockMgr?request=display.content&ContentURL=%2Fcustom%2Fbuyandhold-com%2Fhtml-secFilings.asp%26&symbol=USG&symb=USG&sequenceid=1&guid=5727891
  10. ↑ McKinnon, John (April 4, 2009). "Hedge Fund Paid Summers $5.2 Million in Past Year". Wall Street Journal. Retrieved 4 April 2009.
  11. ↑ Jones, Sam (February 8, 2010). "DE Shaw Eyes Rival Firm's Distressed Holdings". Financial Times. Retrieved 5 December 2013.
  12. ↑ "Hedge fund major to enter India" Business Standard, April 26, 2006 2006
  13. ↑ "http://timesofindia.indiatimes.com/business/india-business/RIL-DE-Shaw-brokerage-business-to-take-off-this-fiscal/articleshow/12565396.cms" The Times of India, April 7, 2012 Reliance Industries Limited
  14. ↑ "Lehman Buys Into D.E. Shaw" The Wall Street Journal, March 14, 2007
  15. ↑ Kishan, Saijel; Keehner, Jonathan (18 February 2009). "Hedge Funds Pressed to Consolidate as Losses Cut Fees". Bloomberg. Retrieved 5 December 2013.
  16. ↑ D.E. Shaw & Co. website D. E. Shaw & Co. Website
  17. ↑ Computing in Science and Engineering
  18. ↑ ISM Seminar abstract
  19. ↑ Rose-Smith, Imogen (27 Feb 2007). "Cracking The Code". Institutional Investor. Retrieved 10 August 2011.
  20. 1 2 "The 2011 Hedge Fund 100 Ranking". Institutional Investor, Inc. May 12, 2011.
  21. ↑ "Hedge Fund 100 Ranking"
  22. ↑ The D. E. Shaw group - Who We Are
  23. ↑ "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
  24. ↑ "Math-M-Addicts: TEACHERS". 21 July 2014.
  25. ↑ "American Regions Mathematics League". 1 August 2011.
  26. ↑ "MIT Battlecode website". Retrieved 1 August 2011.
  27. ↑ "Center for Excellence in Education". Archived from the original on 25 July 2011. Retrieved 1 August 2011.
  28. 1 2 3 Jones, Sam (10 March 2010). "DE Shaw broadens Asian reach". Financial Times.
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