Shaw cracks the capacity code


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