Posted on 09/28/2010 4:58:16 PM PDT by WebFocus
DE Shaw, one of the world’s biggest and most successful hedge fund managers, is to cut up to 10 per cent of its workforce.
Significant job cuts have been announced in New York and London, people familiar with the firm told the Financial Times, with further redundancies across the firm’s global operation.
The move comes amidst one of the hedge fund industry’s most disappointing years on record and reflects the degree to which even the largest managers have struggled to maintain their profitability.
According to Hedge Fund Research, the average hedge fund has returned just 1.45 per cent so far this year.
The cuts at DE Shaw, some of the deepest in the firm’s history, follow a strategic review undertaken by management as a result of large investor outflows this year.
DE Shaw has suffered an estimated $7bn in redemptions over the past few months, according to investors.
As of September 1, the firm managed about $21bn across its range of funds.
A spokesperson for DE Shaw declined to comment.
The firm was one of several big-name managers that “gated” investors during the financial crisis where client withdrawals from funds were automatically restricted in an effort to preserve portfolio values and avoid asset firesales.
Not all investors welcomed the controversial practice, even though in some cases it protected value.
As the gates were progressively lifted this year, the firm saw large amounts of money being withdrawn all at once.
DE Shaw, founded by the mathematician David Shaw in 1988, is known as one of the hedge fund industry’s most successful, if publicity-shy, fund managers. Mr Shaw no longer runs the firm on a day-to-day basis and is now a leading figure in computational biochemical research.
The greater part of DE Shaw’s investments are made using complicated mathematical models that aim to spot hidden market trends or pricing anomalies, although the fund manager has recently expanded into private equity and bottom-up value-driven investing.
In total, the firm currently employs around 1,500 people globally, making it the second- largest hedge fund by the number employees in the world, after the UK’s Man Group.
Thanks for the back up......
May I recommend an excellent book on the subject you'd both enjoy?:
The Myth of the Robber Barons: A New Look at the Rise of Big Business in America
What part of the country are you in?
A marine towing company here in Chicago went bk and their land/operations were cleared out and taken over by an international metals salvage company.
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