Shaw cracks the capacity code

Mon Mar 1, 2004

The former professor may have found the algorithm for scalability

As little as five years ago, it was far from certain that D. E. Shaw would survive the global bond market rout that felled Long-Term Capital Management. Today, the firm is living proof that it is possible to bounce back from near disaster and become one of the most stable and fast-growing industry players. In fact, David Shaw, the founder and majority shareholder, may have found the formula for growth that has eluded other groups.

While Renaissance Technologies and SAC Capital have thrown in the towel and accepted that their businesses cannot absorb more capital and are busy handing money back to investors, Shaw's brainchild is still taking in money. Assets were at $7.3 billion by the end of February and there is no sign that the growth of the last few years is over. Three new strategies were added in...

ISSN: 2151-1845 / CDC10004H


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