D. E. Shaw & Co., L.P.

THE SCOOP

High tech finance

The brainchild of ex-Columbia University computer science professor David E. Shaw, D. E. Shaw is an ultra-private investment and technology-development outfit that operates out of 15 offices, including New York; Silicon Valley; Houston; Kansas City, Kan.; Washington, D.C.; London, U.K.; Shanghai; Honk Kong; Tokyo; and Hyderabad, India. The firm trades stocks, bonds, options, futures, warrants, convertible securities and other financial instruments used by corporations and governments worldwide.  D. E. Shaw employs about 1,300 people all over the world. Since its inception in 1988 until the end of 2008, the firm substantially grew its funds from $28 million to approximately $30 billion, making its founder David Shaw a very wealthy man in a relatively short time.  It also solidified D. E. Shaw's reputation as a giant in the hedge fund business.  In 2009, Absolute Return ranked D. E. Shaw fourth in assets under management for all the hedge funds in the U.S.  However, more recently, the firm experienced a severe decline in its assets due to billions of withdrawals in the wake of the recent financial crisis.  Aas of the beginning of 2011, the firm ranked 20th in hedge fund assets in the U.S., with $14.2 billion.  In total, the firm has about $19 billion in assets.


Only the elite


Like its founder, who served under President Clinton as part of the President's Council of Advisers on Science and Technology, the firm is big into research.  Since its founding in 1988, D. E. Shaw has sought out investment opportunities primarily in the tech and science worlds, relying on research conducted by some of the smartest graduates from mathematics, physics and computer science graduate programs.  (Less than one in every 500 applicants makes it through the company's doors.)  Known as "quants," D. E. Shaw's researchers use computer-driven mathematical formulas to pick investments, manage risk and reduce costs.


That's heady stuff for those on Wall Street without the I.Q. levels to work for D. E. Shaw.  That's likely what earned the firm Fortune magazine's description as "the most intriguing and mysterious force on Wall Street" back in 1996.  Most of the magic occurs behind the closed doors of D. E. Shaw Research, LLC, the internally funded research unit headed up by Shaw himself that engages in "long-term, high-risk research" that will lead to "transformative" scientific innovations - and payoffs.


Founder David Shaw traveled to Wall Street from Stanford University, where he received a PhD, and Columbia University, where he taught computer science until 1986.  By the time Shaw quit his job at Morgan Stanley, where he helped set up the firm's quantitative trading operations, he was fed up with life in a huge investment firm and wanted to start a trading shop where quants could be quants without the political and business friction of larger companies.  So, with $28 million in startup capital in his pocket, Shaw founded D. E. Shaw.  Not surprisingly, throughout his tenure as CEO of the company, Shaw has surrounded himself with fellow brainiacs.  D. E. Shaw's employees include the 2003 U.S. Women's Chess Champion, a Life Master Bridge player, a Jeopardy! winner and a former member of the odds-defying MIT blackjack team.  D.E. Shaw's ranks even include a poet who published a book of verse in 2009 based on the economic crisis.  Together, these team members have orchestrated transactions that varied from investing in existing ventures managed by outside entrepreneurs to start up firms incubated in the D. E. Shaw camp. One such startup: Juno Online Services.  Soon after the firm launched Juno, it went public in 1999 and later merged with NetZero in September 2001 to form United Online, the second-largest Internet access provider in the country at that time, after America Online.

   

Welcome to the club


In October 2007, David Shaw was given the honor of admission to an exclusive club that includes world visionaries such as Al Gore, former Supreme Court Justice Sandra Day O'Connor, Mike Bloomberg, Google Chairman and CEO Eric Schmidt, and filmmaker Spike Lee.  Shaw was inducted into the American Academy of Arts and Sciences, which honors leaders in scholarship, business, the arts and public affairs.  Academy President Emilio Bizzi said the following about the honor, "Throughout its history, Fellows of the Academy have been dedicated to advancing intellectual thought and constructive action in America and the world.  We are confident that our newest group of Fellows will help us fulfill that mission in significant ways."

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D. E. Shaw & Co., L.P.


120 W. 45th Street
39th Floor, Tower 45
New York, NY 10036
Phone: (212) 478-0000
Fax: (212) 478-0100
www.deshaw.com

STATS


  • Employer Type: Private
  • Chief Scientist, D. E. Shaw Research: David E. Shaw
  • 2011 Employees: 1,300

Major Office Locations

  • Bermuda, Bermuda
  • Shanghai, China
  • Silicon Valley, CA
  • Washington, DC
  • Kansas City, MO
  • New York, NY
  • Houston, TX
  • London, United Kingdom
  • Mumbai, India
  • Hyderabad, India
  • Tokyo, Japan
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Health Service Administrator

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  • 25
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  • 100+
Yearly Salary Range (US$ Thousands)