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D.E. Shaw’s Biggest Hedge Fund Saw 10.5% Gain Last Year

Melissa Karsh

(Bloomberg) -- D.E. Shaw & Co.’s flagship hedge fund extended its winning streak, gaining about 10.5% last year.

The returns were driven by gains in both the systematic and discretionary investment strategies, according to a person familiar with the matter. The $14 billion Composite fund, which invests across multiple strategies and is the company’s longest-running, has notched double-digit returns in seven of the past eight years.

Hedge funds on average gained 8.6% in 2019, according to the HFRX Global Hedge Fund Index. That compares with a 32% rise for S&P 500 Index, with dividends reinvested.

A spokesman for D.E. Shaw declined to comment.

In 2018, the Composite fund -- the firm’s largest -- gained 11.2% and rose 10.3% the year prior. D.E. Shaw’s Oculus Fund, which is more macro-oriented and launched in 2004, posted a an estimated return of 11.8% last year.

D.E. Shaw was founded in 1988 by computer scientist David Shaw and has more than $50 billion in assets under management. It’s one of the longest-running hedge funds and among the earliest to use complex mathematical models for trading.

The Composite fund has largely been closed to new investors since mid-2013. The firm planned to raise fees at the start of this year to 3% of assets and 30% of profits, cementing D.E. Shaw’s standing as one of the pricier funds in the industry.

(Updates with Oculus Fund from sixth paragraph)

To contact the reporter on this story: Melissa Karsh in New York at mkarsh@bloomberg.net

To contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Alan Mirabella

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