The D.E. Shaw group has added a private equity and a private credit offering to its fund line-up, raising $1.1 billion in investor commitments.
The firm’s entities, principals and employees contributed more than $150 million to the two new funds and the combined fundraises are the latest in a long-term buildout of the $60 billion investment firm’s private investment strategies.
The D.E. Shaw Diopter Fund attracted $650 million and is focused on private credit and will invest in synthetic securitizations, which help banks manage risks and enhance balance sheet and business model efficiency.
The firm’s first private credit fund dates back to 2008 and since 2012, officials said they have raised more than $3.5 billion in the asset class including the Diopter fund. D.E. Shaw’s Regulatory Capital Optimization Strategy team that is tucked within the asset-backed securities team and private credit investment team has been charged with oversight of the new fund. The fund investment will be led by Rich McKinney, Marianna Fassinotti and Syril Pathmanathan.
“We see attractive opportunities in the synthetic securitization marketplace, and issuance appears poised to accelerate further as the regulatory landscape for financial institutions evolves and the banking sector seeks to better manage risks, optimize balance sheets, and improve profitability,” said McKinney, a managing director of the D.E. Shaw group who oversees the firm’s Private Credit investment unit.
Back in 2021, D.E. Shaw raised over $1 billion for the D.E. Shaw Alkali Fund V, which is dedicated to investing in stressed and distressed assets, financings and special situations opportunities.
Meanwhile, D.E. Shaw Voltaic Fund is the firm’s first standalone dedicated private equity fund, although the New York firm has made private investments throughout its history, much of which was in the hedge fund arena. Voltaic received more than $450 million in capital and is overseen by Edwin Jager, who is a managing director who oversees the firm’s Fundamental Equities team, will be the fund’s portfolio manager.
“We believe Voltaic is well-positioned to take advantage of both the current and longer-term opportunity set and will benefit from our extensive experience investing in equity opportunities across private and public markets, in addition to our sourcing, data analysis, and risk management capabilities,” Jager said.