Hedge Funds

D. E. Shaw adds selective shorting to long portfolio

by

D. E. Shaw Investment Management, the $23 billion multistrategy firm founded by David Shaw, has launched a series of selective shorting strategies targeted at long-only institutional investors.

Responding to years of academic research demonstrating that selective shorting allows for the construction of more efficient portfolios, institutional investors are showing an increasing interest in long-only strategies that incorporate moderate shorting. Major public players, including the California Public Employees' Retirement System, are now in fact searching for managers to provide this form of hybrid investment management.

"The academic evidence in favor of allowing some measured level of shorting is very compelling," said