D. E. Shaw offers investors chance to unload side pocket exposure

By Simone Foxman

Mon Mar 31, 2014

Investors get one-time option to participate.

D. E. Shaw & Co. is offering a deal that will allow investors in the illiquid side pocket holdings of the firm’s multistrategy Composite Fund to unload their exposure by July without exposing them to substantial tax ramifications, according to a letter to investors dated March 28 that was obtained by Absolute Return.

The firm, which is known for its quantitatively-driven investment prowess, placed its private equity and venture capital investments in a side pocket starting in 2006. According to a side pocket exposure report and performance update from September 2013, the aggregate performance of these private equity holdings has been mediocre, with the September 30 market value of $1,158,645,000 about $8.5 million below the $1,167,126,000 historical cost of the existing positions.

The Composite Fund offers both a domestic and an offshore feeder fund. Investors with side pocket interests in the offshore fund...

ISSN: 2151-1845 / CDC10004H


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