D.E. Shaw & Co.’s two biggest hedge funds posted returns of at least 20% last year, as volatile markets provided ample trading opportunities.
(Bloomberg) — D.E. Shaw & Co.’s two biggest hedge funds posted returns of at least 20% last year, as volatile markets provided ample trading opportunities.
The quant giant, which manages more than $60 billion, gained 24.7% in its flagship Composite fund, according to a person familiar with the matter. The fund is D.E Shaw’s largest and makes bets across various asset classes and geographies.
The Oculus fund, which mostly makes macro wagers, rose 20% last year, the person said, asking not to be identified discussing private information.
A representative for the New York-based firm declined to comment.
Multistrategy and macro hedge funds broadly had one of their best years in 2022, as spiraling inflation and central bank actions prompted big swings in bond and equity markets. The S&P 500 slid about 19% last year, while the Bloomberg US Corporate Total Return bond index fell almost 16%. Many of the industry’s biggest names in those strategies posted double-digit gains.
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D.E. Shaw plans to return a substantial portion of 2022 profits to investors. In 2021, it returned profits in full.
In October, the firm hiked fees for the second time since 2019, making them one of the most expensive in the industry. It raised performance fees for the Oculus, Composite and Valence funds by 5 percentage points to as much as 40%. Composite has had only one down year since its inception in 2001, while Oculus, which started in 2004, has never had any.
Read more: Hedge Fund Giant D.E. Shaw Plans to Increase Fees as High as 40%
David E. Shaw founded his eponymous firm in 1988. It was one of the earliest funds to focus on using complex algorithms in trading. The company later also incorporated human-run investing, and makes hedge fund, private equity and long-oriented wagers. Shaw stepped back from day-to-day management in the early 2000s, leaving the firm in the hands of an executive committee.
(Updates with indexes in fifth paragraph. A previous version of this story corrected the name of the fund in seventh paragraph.)
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