Hedge fund D.E. Shaw to close funds for new clients - FT

Reuters

Oct 8 (Reuters) - D.E. Shaw is closing its doors to newclients, joining other large hedge funds that have stoppedaccepting cash into their flagship funds, the Financial Timesreported on Monday.

Oculus, D.E. Shaw's flagship fund, generated a return of 20percent in 2012, compared to 18 percent in 2011, according tothe FT, while performance this year at the hedge fund has beenmore modest, an investor told the paper.

Shaw's Oculus and Heliant funds were closed earlier thisyear and its flagship multi-strategy fund, Composite, was closedat the end of the summer, the FT reported, citing peoplefamiliar with the matter. ()

Some smaller bespoke funds, investing in specialist areassuch as reinsurance or mortgage bonds, will remain open to newmoney at the New York-based fund, the FT said.

D.E. Shaw could not immediately be reached for comment byReuters outside of regular U.S. business hours.

Many traditional hedge fund strategies have become far lessprofitable due to quantitative easing, bank deleveraging and atail-off in corporate dealmaking, the FT said, adding that onlytwo of the largest six hedge funds - Man Group Plc andOch-Ziff Capital Management Group LLC - are stillaccepting cash into their flagship funds.

Hedge fund returns have risen roughly 3.6 percent on averagethrough July, according to estimates by Bank of America MerrillLynch, while the S&P 500 was up 18.2 percent in that period.

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