DE Shaw Forms Team To Acquire Rivals' Distressed Assets

Published: 09-Feb-2010

DE Shaw, a New York-based hedge fund, private equity and technology development firm, has hired a team to acquire the distressed asset portfolios of rival hedge fund companies, reported the Financial Times.

Reportedly, the DE Shaw Portfolio Acquisitions Unit, which it launched in 2009, intends to cash in on several illiquid assets that are trading at steep discounts and majority of investors' desire to offload them from their portfolios that are yet to stage a recovery after last years market rallies.

DE Shaw is said to be particularly interested in acquiring so-called 'side-pocketed' assets from other hedge funds. Side pocket is a type of account used in hedge funds to separate illiquid assets from other more liquid investments. Of late, they have become a commonplace for hedge fund managers to safeguard ongoing returns and performance in their main funds.

The DE Shaw unit will not run its own fund, but is mandated to explore opportunities for investment. The firm currently runs a number of sub-strategies, most of which feed into its flagship Oculus fund and the DE Shaw composite fund, reported the newspaper.

DE Shaw was founded by David Shaw, a Stanford University-trained computer scientist and a former Columbia University professor, in 1988. With offices in North America, Europe, the Middle East, and Asia, it has more than 1,600 employees and approximately $28bn in investment and committed capital.

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