October 8, 2013 / 4:55 AM / in 4 years

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

Oct 8 (Reuters) - D.E. Shaw is closing its doors to new clients, joining other large hedge funds that have stopped accepting cash into their flagship funds, the Financial Times reported on Monday.

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

Shaw’s Oculus and Heliant funds were closed earlier this year and its flagship multi-strategy fund, Composite, was closed at the end of the summer, the FT reported, citing people familiar with the matter. ()

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

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

Many traditional hedge fund strategies have become far less profitable due to quantitative easing, bank deleveraging and a tail-off in corporate dealmaking, the FT said, adding that only two of the largest six hedge funds - Man Group Plc and Och-Ziff Capital Management Group LLC - are still accepting cash into their flagship funds.

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

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