D. E. Shaw & Co. - Wikipedia, the free encyclopedia | Shaw Capital Management Profile Reviews
The firm was founded by David E. Shaw, a former Columbia University faculty member and has more than 1,200 employees. In 2011 it had $19 billion dollars in investment capital. [2] The company's focus is the intersection between technology and finance.[citation needed] The firm and its affiliates applies quantitative and qualitative trading strategies to hedge fund management and other investments. It makes private equity investments in technology, health care, and financial service firms and distressed company acquisitions.[citation needed]
In August 1996, Fortune described the firm as "the most intriguing and mysterious force on Wall Street". The company has managed up to $40 billion in aggregate capital and is considered one of the world's largest hedge funds as measured by assets under management.[3] In October 2010 the company was managing approximately $20 billion in investment and committed capital.[2][4][2]
D. E. Shaw supports educational programs such as Math-M-Addicts (teachers are D. E. Shaw & Co. employees),[citation needed]American Regions Mathematics League[5] Worldwide Online Olympiad Training (WOOT), United States of America Mathematics Olympiad and theInternational Mathematics Olympiad, Mathematical Olympiad Program, the MIT 6.370 Battlecode Competition,[6] and The Center for Excellence in Education[7]
[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]
In 1998, Citigroup made an unsecured loan to the company in the form of credit and monies allocated to arbitrage trading software the company developed to buy derivatives and debt instruments.[8]
Many of D. E. Shaw's headline-making transactions are related to investments in 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.[9] 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.[10][11] [12]
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.[13]
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