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D. E. Shaw Group Review

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This review was produced by SmartAsset based on publicly available information. The named firm and its financial professionals have not reviewed, approved, or endorsed this review and are not responsible for its accuracy. Review content is produced by SmartAsset independently of any business relationships that might exist between SmartAsset and the named firm and its financial professionals, and firms and financial professionals having business relationships with SmartAsset receive no special treatment or consideration in SmartAsset’s reviews. This page contains links to SmartAsset’s financial advisor matching tool, which may or may not match you with the firm mentioned in this review or its financial professionals.

D. E. Shaw Group is a large hedge fund with its headquarters located in New York City. The firm manages more than $82 billion in client assets across 39 pooled vehicles, or funds. D. E. Shaw has a significantly large team of financial advisor professionals totaling 348. It employs hundreds of additional individuals who help manage other aspects of the firm's functions. The firm makes investments in a wide array of areas, such as stocks, exchange-traded funds (ETFs), mutual funds and other securities.

Certain funds may be made up of certain types of investments. D. E. Shaw's hedge funds, like other similar funds, are only available to accredited investors. If this status doesn't apply to you, consider using SmartAsset's free financial advisor matching tool to speak with a local advisor.

D. E. Shaw Background

D. E. Shaw was founded in 1988 and has been in business in New York ever since. The firm also operates in places outside the city as well, though, including in Bermuda, Boston, Denver, Kansas City, Princeton, Silicon Valley, Europe and Asia. DESCO LP serves as the managing member of many of D. E. Shaw's entities. Dr. David Elliot Shaw is DESCO LP's principal owner, though other individuals hold minority stakes in the company.

This firm works with a variety of clients that invest in its funds. More specifically, these include mainly institutional investors and certain individuals.

D. E. Shaw Investment Philosophy

D. E. Shaw is known for taking a very quantitative approach to its hedge fund strategies. The firm invests globally, taking advantage of both public and private markets to help drive growth in its various funds. Strategies are similarly broad-based. They include systematic strategies, which follow quantitative, technical and computational techniques, discretionary strategies that hinge on more human and fundamental analysis and hybrid strategies that look to combine both the aforementioned systematic and discretionary approaches.

Each fund at D. E. Shaw is different, and clients can familiarize themselves with the specifics, objectives and restrictions of any fund when deciding to invest. There are numerous documents for investors to review when it comes to any specific fund, such as management agreements, offering memoranda and other governing documents.

With regards to investing, the firm looks to identify underpriced or overpriced securities and take advantage of them. They also look to reduce transaction costs while mitigating risks. The firm relies on both external and internal knowledge and research when making its investment decisions.

Largest Hedge Funds Managed by D. E. Shaw

D. E. Shaw Composite Portfolios, LLC

  • AUM: $35,144,577,041
  • Minimum: $1,000,000
  • Beneficial Owners: 786

D. E. Shaw Oculus Portfolios, LLC

  • AUM: $26,420,847,757
  • Minimum: $1,000,000
  • Beneficial Owners: 366

D. E. Shaw Valence Portfolios, LLC

  • AUM: $15,465,219,585
  • Minimum: $1,000,000
  • Beneficial Owners: 182

D. E. Shaw Multi-Asset Portfolios, LLC

  • AUM: $3,544,057,971
  • Minimum: $1,000,000
  • Beneficial Owners: 20

DeSalkiv Portfolios, LLC

  • AUM: $351,126,360
  • Minimum: $1,000,000
  • Beneficial Owners: 52

Fees at D. E. Shaw

Fee schedules for the funds at D. E. Shaw vary based on the specific fund. However, most funds take both a performance-based fee and an asset-based fee. The asset-based fee, or management fee, is calculated based on a percentage of the market value of a given fund. This fee may range up to 3.5% for certain funds.

Performance-based fees are calculated based on a percentage of the gain in a given fund and may range from 15% to 35% of net profits. For more specific information about specific funds, you'll need to reach out directly to D. E. Shaw. 

Management fees are typically paid monthly or quarterly, in advance. 

What to Watch Out For

Note that when it comes to hedge funds, only accredited investors are eligible for investment. Accredited investors need to have at least $200,000 of earned income ($300,000 for couples) over the past two years. This must be coupled with a reasonable assumption that said income trend will continue in the future. You can also be considered an accredited investor if you have at least a $1 million net worth (after subtracting the value of your primary residence), either on your own or together with your spouse.

D. E. Shaw also has had several regulatory disclosures listed on its Form ADV in the past. Issues covered by these various disclosures include missing regulatory deadlines, violating short-selling restrictions and violating position limits. As a result of each of these disclosures, certain sanctions were put on the firm, such as fines, cease and desist and disgorgements.

Becoming a Client of D. E. Shaw

As noted above, only accredited investors can work with D. E. Shaw. If you meet these standards and are interested in getting in on a hedge fun, get in touch with the firm directly. You can do so by calling over the phone or visiting at one of its offices. The firm is not publically traded, so you won't be able to buy stock in D. E. Shaw.

Investing Tips

  • When it comes to investing, it pays to be prepared. That's why it can be a good idea to work with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you're working on your investments by yourself, you should try to have an idea as to what you need to earn to reach your goals. SmartAsset's free investment calculator can help you figure out where you stand and how much further you have to go.

How Long $1mm Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology We analyzed data on average expenditures for seniors, cost of living and investment returns to determine how many years of retirement a $1 million nest egg would cover in cities across America.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research