Lehman takes 20% stake in D. E. Shaw


In the latest of a string of hedge fund stakes being bought by investment banks, Lehman Brothers announced this week that it has taken a 20% interest in the legendary D. E. Shaw group. With $26.3 billion in assets as of January 1, the quantitatively driven firm ranked fourth in the most recent Absolute Return Billion Dollar Club.

The deal has to be the most expensive bank/hedge fund combination to date. Based on valuations of other hedge fund sales, Lehman likely paid between $1 billion and $1.7 billion for its interest in the top-level investment management entities of D.