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Fund Firm Turns Eye to Securitized Issues
Asset Backed Alert, Harrison Scott Publications Inc. (September 5, 2003)
D.E. Shaw wants to start buying asset-backed securities.
Word has it the $5 billion hedge-fund operator is thinking about setting up a stand-alone vehicle to purchase an unspecified amount of securitized products, although it's also possible that the New York firm will make the investments via existing funds.
Details are sketchy, but it's known that D.E. Shaw is searching for an experienced asset-backed trader to head the initiative. The individual would research D.E. Shaw's ABS investments while helping to hire a group of junior traders that he would oversee.
D.E. Shaw hasn't been an active buyer of asset-backed securities before, although it has invested in other fixed-income products -- even after the late-1998 bond-market rout led to a $200 million loss for its highly leveraged portfolio. The firm, known for its quantitative-trading strategy, invests in a variety of stocks, bonds, derivative products and distressed securities through its hedge funds. It also makes venture-capital investments in technology companies. D.E. Shaw was founded in 1988 by chief executive David E. Shaw, who earlier helped set up the quantitative-trading desk at Morgan Stanley.