D. E. Shaw & Co. Facts for Kids

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

Former Headquarters at 1166 Avenue of the Americas, in New York City
Type	Limited partnership
Industry	Hedge fund
Founded	1988; 37 years ago (1988)
Founder	David E. Shaw
Headquarters	Two Manhattan West, New York City, New York, U.S.
Key people	Anne Dinning Max Stone Eric Wepsic Eddie Fishman Alexis Halaby Edwin Jager
Products	Hedge fund, Private equity
AUM	US$65 billion (2025)
Number of employees	2,500 (2022)

D. E. Shaw & Co., L.P. is a large company that manages money for people and businesses. It was started in 1988 by David E. Shaw in New York City. The company is famous for using complex math and computer programs. They use these tools to find smart ways to invest money in financial markets. As of 2025, D. E. Shaw manages about $65 billion. This includes different types of investments.

How D. E. Shaw Started and Grew

Early Days: 1988 to 1996

David E. Shaw, who used to be a computer science professor, founded the company. D. E. Shaw began investing in June 1989. They started with $28 million from investors. The company kept its special trading computer programs a secret. Many of their first employees were scientists, mathematicians, and computer experts.

In 1994, the company made a good profit of 26 percent. They managed hundreds of millions of dollars. They used strategies like finding small differences in prices to make money. Besides managing money, they also started other businesses. These included an email service called Juno Online Services. They also opened an office in India. This office focused on creating software for their trading.

Working with Bank of America in 1997

In 1997, D. E. Shaw made a deal with Bank of America. Bank of America gave them almost $2 billion. This deal allowed D. E. Shaw to keep more of their profits. Bank of America hoped to benefit from D. E. Shaw's investment skills. However, the 1998 Russian financial crisis caused big losses for D. E. Shaw. Bank of America lost $570 million from this investment.

After this, D. E. Shaw had to let many employees go. Their team shrank from 540 people to 180. The money they managed also dropped a lot.

New Leadership in 2002

David E. Shaw led the company from 1988 to 2001. In 2002, he stepped back from daily tasks. He wanted to focus on D. E. Shaw Research, a science research company. A team of six senior leaders took over the daily management. This team stayed mostly the same for many years.

The 2008 Financial Crisis

In 2007, D. E. Shaw managed $20 billion. A large part of their investments was in stock markets. In August 2007, they lost five percent of their money. This was their worst month at that time. By September 2008, the company had borrowed a lot of money. In late 2008, they lost the gains they had made.

Their investments in credit were hit hardest during the 2008 financial crisis. To stop losing more money, D. E. Shaw temporarily stopped people from taking their money out. By 2009, they had returned about $2 billion to clients. Later, they returned another $7 billion.

The total money D. E. Shaw managed fell from $34 billion in 2007 to $21 billion in 2010. They also reduced their staff by 10 percent.

Agreements for Employees in 2019

In September 2019, D. E. Shaw asked all employees to sign non-compete agreements. These agreements stop employees from working for a competitor right after leaving. This was new for the company and some employees did not like it.

Legal Matters in 2022 and 2023

Defamation Case

In 2022, D. E. Shaw and some leaders were found responsible for saying false things about a former employee. They had to pay $52 million to Daniel Michalow. The company had claimed they fired him for bad behavior. But a panel found these claims were not true.

SEC Rules

In 2023, the SEC said D. E. Shaw broke rules about protecting whistleblowers. The company had confidentiality agreements that were too strict. These agreements could stop employees from reporting problems to the government. D. E. Shaw agreed to pay $10 million to settle these charges.

How D. E. Shaw Invests Money

The company manages different investment funds. They use a lot of math and special computer technology. This helps them with their research. They also look at other factors to invest in companies. These include technology, wind power, and real estate. D. E. Shaw has also invested in new technology businesses. Examples include Juno Online Services and Farsight.

Money Under Management

In 2011, the company managed $40 billion in total. By June 1, 2021, this amount had grown to $55 billion. About $35 billion of this was in alternative investments. The rest was in long-term investments. In 2020, D. E. Shaw & Co. was ranked as the 10th largest hedge fund in the world.

Private Investments

In the U.S.

In 2004, a part of D. E. Shaw bought the toy store FAO Schwarz. The toy store had gone out of business. FAO Schwarz reopened in New York and Las Vegas later that year. In the same year, D. E. Shaw also bought the online parts of KB Toys. These continued as eToys.com.

In 2006, D. E. Shaw was involved in helping Penn National Gaming get money. Penn National Gaming is a casino and racetrack company. This showed how involved D. E. Shaw was in big financial deals. In 2009, D. E. Shaw started a new unit. Its goal was to buy assets from other investment funds.

In India

D. E. Shaw started working in India in 2006. They made several big private investments there. This included a partnership with Reliance Industries. They also invested in a real estate company and a publishing group. D. E. Shaw reduced its private investments in India after 2013.

Company Structure

Leadership Team

The current Executive Committee includes Anne Dinning, Max Stone, Eric Wepsic, Eddie Fishman, Alexis Halaby, and Edwin Jager. The company has 2,500 employees.

Who Owns the Company

In 2007, David Shaw sold a 20 percent share of the company to Lehman Brothers. This was part of his plan to spread out his own investments. At that time, D. E. Shaw managed $30 billion. Even when Lehman Brothers went out of business in 2008, their share in D. E. Shaw & Co. stayed the same.

In 2015, a company called Hillspire bought this 20 percent share. Hillspire is the family office of Google chairman Eric Schmidt.

Company Activities

Helping the Community

D. E. Shaw supports educational programs. These include math competitions like the American Regions Mathematics League and the International Mathematical Olympiad. They also support The Center for Excellence in Education.

Office Locations

The company has offices in many countries. These include the United States, China, England, India, Singapore, Luxembourg, and Bermuda.

D. E. Shaw & Co. facts for kids

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