Notable Articles

D.E. Shaw is adapting its strategy to counter intensifying competition for talent and rising technology costs by moving some of its best investment ideas to an employee-only fund and tightening client terms. With record assets of about $125 billion, strong recent returns, and a collective leadership structure, the firm is also expanding into human-trader-led strategies while maintaining a strict focus on long-term risk management.

• The flagship Composite fund returned 15.3% and Oculus returned 30% through September 2026, with total assets reaching a record of about $125 billion.
• Starting in January, the firm will launch an employee-only fund seeded half by the Composite fund, with staff and partner money already totaling more than $15 billion.
• Client terms are tightening: lockups are extending to up to four years, and a 0.12% technology surcharge is being added on top of a 0.23% expense fee, alongside its existing 3% management and 35% incentive fees.
• D.E. Shaw raised about $6 billion for Cogence, its first fund led by human traders, and marketed it to wealthy individuals, breaking with its prior approach.
• The seven-member executive committee emphasizes collective decision-making and avoids highly leveraged trades, though a consultant downgraded its management rating to above average in 2024.

Elliott Investment Management (led by Paul Singer and Jonathan Pollock) warned that debt-fueled risk-taking, AI hype, budget deficits, inflation, private credit, and speculative trading indicate a substantial bear market may be ahead, comparing the climate to the 1920s boom preceding the Great Depression. The $80 billion firm reported flat third-quarter returns and under 2% gains for the first nine months of 2026, trailing the S&P 500, T-bills, and the hedge-fund composite index. The firm is positioned defensively, prioritizing capital preservation to deploy during turmoil, and sees opportunities in healthcare activism, producing energy properties, and dislocated credit markets.

• Elliott's performance lagged: flat Q3 and under 2% YTD through September, trailing the S&P 500's ~13% and T-bills' ~3%.
• Q3 sector results were mixed: commodities, arbitrage, and credit hedges were profitable; distressed debt and gold/currency/equity/rate hedges were not.
• The firm's strategy is to protect the downside and keep capital ready to buy bargains when the market turns.
• It identifies activist investing in healthcare and energy properties, plus buying from forced sellers in credit, as upcoming opportunities.
• Elliott warns that disruption in only one or two boom factors could trigger a cascading unwind, shifting the market from FOMO to FOGO (fear of getting obliterated).