DE Shaw’s 150-person layoffs spooked the hedge fund industry a bit last week.The fund laid off 10% off its work force at all levels, including portfolio managers.
A day later, a source revealed a little background on the layoffs, which if you remember was:
- DE Shaw’s Composite International fund is down 2.6% so far this year
- Its assets have dropped from $39 billion in mid-2008 to $29 billion under management in mid-2009, and $21 billion currently. The firm had not yet made staffing cuts.
- Their UK and Dubai units lost $14.23 million last year
- Gating. And they’ve been limiting investors’ access to their cash. One investor said: “My feeling is that they haven’t been rushing to return money to investors. We haven’t seen an investor-friendly process.”
And now we have more details from an investor who asked not to be named.
- The layoffs cut the bottom 10% of performers (which is kind of obvious)
- They made cuts across all asset classes – but disproportionately cut real estate
We heard that DE Shaw made the cuts because they were changing their strategy a bit – and now we know that the change in strategy decreases their stake in real estate.
“If you don’t own a home buy one.”
“If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.”
But everything he said that day was a little wild. Read more >