DE Shaw delivers strong returns in 2020

investment returns

DE Shaw’s flagship multi-strategy fund delivered net returns of +19.4 per cent for investors in 2020, according to a person familiar with the firm’s results. 

The DE Shaw Composite Fund (Composite), the firm’s largest fund, launched in 2001 and provides investors with exposure to the broadest array of the firm’s absolute return strategies. Last year’s returns, in what, for many, was a hugely volatile period, build on 2019’s net annualised return of +10.4 per cent. 

DE Shaw is widely regarded as one of the industry’s most successful hedge fund managers. Since 2001, Composite has posted an annualised net return of +11.7 per cent and only recorded one losing calendar year over two decades. This has helped generate a net Sharpe Ratio of 1.83. 

Composite is designed to achieve attractive risk-adjusted returns and, importantly, provide low correlation to major asset classes, including equity and bond market DE Shaw delivers strong returns in 2020 

DE Shaw’s flagship multi-strategy fund delivered net returns of +19.4 per cent for investors in 2020, according to a person familiar with the firm’s results. The DE Shaw Composite Fund (‘Composite’), the firm’s largest fund, launched in 2001 and provides investors with exposure to the broadest array of the firm’s absolute return strategies. Last year’s returns, in what, for many, was a hugely volatile period, build on 2019’s net annualised return of +10.4 per cent. 

DE Shaw is widely regarded as one of the industry’s most successful hedge fund managers. Since 2001, Composite has posted an annualised net return of +11.7 per cent and only recorded one losing calendar year over two decades. This has helped generate a net Sharpe Ratio of 1.83. 

Composite is designed to achieve attractive risk-adjusted returns and, importantly, provide low correlation to major asset classes, including equity and bond markets. 

According to the firm’s annual financial figures for 2020, the DE Shaw Oculus Fund enjoyed an even stronger 12 months than the flagship fund, generating a net return of +25.4 per cent. Oculus is a more macro-orientated multi-strategy fund. Since its inception in 2004, Oculus has recorded net annualised returns of +12.5 per cent with a Sharpe Ratio of 1.40. It has never had a losing year. Last year’s returns represent a modest increase on 2019’s net return of +11.7 per cent. 

The person familiar with DE Shaw’s figures said 2020’s strong results in Composite and Oculus were supported by positive returns in both systematic and discretionary investment strategies and with positive results in all of the firm’s main underlying absolute return strategies. 

Both Composite and Oculus have demonstrated less than a 20 per cent correlation to the S&P 500 since inception. While Oculus has been closed to new capital since 2012, Composite raised an additional USD2 billion in April 2020 to take advantage of dynamic opportunities in the market. 

DE Shaw’s AUM was more than USD55 billion as of 1 December 2020. More than USD35 billion sits within its suite of alternative investment strategies. 
 

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James Williams
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