(Bloomberg) — D.E. Shaw & Co.’s biggest hedge fund returned just under 10% in 2023, in a challenging year when the quant firm’s peers produced mixed results.
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The $60 billion firm gained 9.6% in its flagship Composite fund, according to a person familiar with the matter. The fund makes bets across various asset classes and geographies.
The Oculus fund, which mostly makes macro wagers and is the firm’s second biggest, rose 7.8% last year, the person said.
A representative for the New York-based firm declined to comment.
Multistrategy and macro hedge funds posted a wide range of results in 2023, unlike the previous year, when many of the industry’s biggest firms boasted double-digit gains. On average, multistrategy funds rose just 4.9% last year through November, according to PivotalPath, while macro funds barely made money with a 1.7% gain.
Markets proved tough to navigate in 2023, when unusually high volatility in the US bond market caught some traders off guard. Meanwhile, equity markets jumped more than many investors expected, with the S&P 500 up 24% for the year, thanks largely to gains from several big technology companies.
The firm plans to return all 2023 profits in the two funds to clients.
The Composite fund has had only one losing year since its launch in 2001 and has posted double-digit gains in 17 out of the past 22 years.
The firm’s Oculus fund has never had a negative year, annualizing at almost 13% since its 2004 inception.
David E. Shaw founded his eponymous firm in 1988. It was one of the earliest funds to focus on using complex algorithms to trade. The company later incorporated some human-run investing, and now also has private equity and long-oriented wagers. Shaw stepped back from day-to-day management in the early 2000s, leaving the firm in the hands of an executive committee.
(Updates with S&P 500 gains in sixth paragraph)
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