D. E. Shaw & Co
Encyclopedia
D. E. Shaw & Co., L.P. is an American-based global investment management firm founded in 1988 by David E. Shaw and based in New York City
. The firm's trading mode is systematic and computer-driven.
, an Internet access provider.
, with terms that allowed D.E. Shaw & Co. to keep a higher fraction of profits than hedge fund investors normally allow. After the Russian debt default in 1998, the company suffered losses in its fixed-income trading as did many hedge funds.
Several of D. E. Shaw & Co.'s publicly reported transactions have involved investments in bankrupt companies. 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
. 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.
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.
faculty member and has more than 1,300 employees. The company has managed up to $40 billion in aggregate capital and in 2011 had $15.6 billion in assets under management
and was ranked as the 21st largest hedge fund by Institutional Investor.
, as part of a broader strategy to diversify his personal holdings. At the time of its bankruptcy in September 2009 Lehman Brothers Holdings Inc., had holdings in D.E. Shaw & Co.
. 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, and The Center for Excellence in Education
.
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
. The firm's trading mode is systematic and computer-driven.
Investment Strategy
The company manages hedge funds that make extensive use of quantitative methods and proprietary computational technology to manage its investments. In conjunction with such methods, the Company also uses qualitative analysis to make private equity investments in technology, wind power, real estate, and financial service firms and in distressed company financing.In addition to its financial businesses, D. E. Shaw & Co. has provided private equity capital to technology-related business ventures, including Juno Online ServicesJuno Online Services
Juno is an Internet service provider based in the United States. It is a subsidiary of United Online, which also owns NetZero and Kmart's BlueLight internet service.-History:...
, an Internet access provider.
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 AmericaBank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
, with terms that allowed D.E. Shaw & Co. to keep a higher fraction of profits than hedge fund investors normally allow. After the Russian debt default in 1998, the company suffered losses in its fixed-income trading as did many hedge funds.
Several of D. E. Shaw & Co.'s publicly reported transactions have involved investments in bankrupt companies. 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
Las Vegas, Nevada
Las Vegas is the most populous city in the U.S. state of Nevada and is also the county seat of Clark County, Nevada. Las Vegas is an internationally renowned major resort city for gambling, shopping, and fine dining. The city bills itself as The Entertainment Capital of the World, and is famous...
in the fall of 2004. In the same year, D. E. Shaw affiliate, Laminar Portfolios, acquired the online assets of KB Toys
KB Toys
K·B Toys was a chain of mall-based retail toy stores in the United States. It was founded in 1922 by the Kaufman brothers. K·B operated 605 stores in 44 U.S. states, Puerto Rico as well as Guam. It was privately held in Pittsfield, Massachusetts...
, which continued operating as eToys.com
EToys.com
eToys.com is a retail website that sells toys via the Internet. It was established by a startup company of the same name during the dotcom boom, but the company went bankrupt towards the end of the boom, after which the site went through a number of changes of ownership, and was acquired by Toys...
. 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.
In 2006, Lawrence Summers
Lawrence Summers
Lawrence Henry Summers is an American economist. He served as the 71st United States Secretary of the Treasury from 1999 to 2001 under President Bill Clinton. He was Director of the White House United States National Economic Council for President Barack Obama until November 2010.Summers is the...
became managing director at D.E. Shaw & Co. and left in 2008, receiving $5.2 million in compensation for that period.
Financial Crisis
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.Corporate Affairs
The firm was founded by David E. Shaw, a former Columbia UniversityColumbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...
faculty member and has more than 1,300 employees. The company has managed up to $40 billion in aggregate capital and in 2011 had $15.6 billion in assets under management
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
and was ranked as the 21st largest hedge fund by Institutional Investor.
Management
David Shaw directed the company from 1988 to 2001 however, by 2010, the firm's management structure had evolved into a six member executive committee.Company Ownership
In 2007, David Shaw sold a 20% minority stake in the Shaw group to Lehman BrothersLehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
, as part of a broader strategy to diversify his personal holdings. At the time of its bankruptcy in September 2009 Lehman Brothers Holdings Inc., had holdings in D.E. Shaw & Co.
Corporate Responsibility
D. E. Shaw supports educational programs such as Math-M-Addicts (teachers are D. E. Shaw & Co. employees), American Regions Mathematics LeagueAmerican Regions Mathematics League
The American Regions Mathematics League , is an annual high school mathematics team competition held simultaneously at four locations in the United States: the University of Iowa, Penn State, UNLV, and the newly added site at the University of Georgia. Past sites have included San Jose and at Duke...
. Worldwide Online Olympiad Training
Worldwide Online Olympiad Training
The Worldwide Online Olympiad Training program was established in 2005 by Art of Problem Solving, with sponsorship from Google and quantitative hedge fund giant D. E. Shaw & Co., in order to meet the needs of the world's top high school math students. Sponsorship allowed free enrollment for...
(WOOT), United States of America Mathematics Olympiad and the International Mathematics Olympiad, Mathematical Olympiad Program
Mathematical Olympiad Program
The Mathematical Olympiad Program or MOP is an intensive summer program held at University of Nebraska-Lincoln. The main purpose of MOP, held since 1974, is to select and train the six members of the U.S. team for the International Mathematical Olympiad . Students qualify for the program by taking...
, the MIT 6.370 Battlecode Competition, and The Center for Excellence in Education
Center for Excellence in Education
The Center for Excellence in Education nurtures careers of excellence and leadership in science and technology for academically talented high school and college students. Co-founded in 1983 by the late Admiral Hyman G...
.
Offices
- Hong Kong - Opened 2007 to focus on Chinese Private Equity
- India - largest office with 700 employees after US
- Shanghai - 2010
- Tokyo - 2010