As one of the most significant hedge funds in the world, DE Shaw is so famous that anyone who is even remotely connected to the investment sector is familiar with it. It can safely be said that even those who aren’t involved with the investment sector may have heard of the firm at the very least.
Founded in 1988, the over 30-year old firm is synonymous with wealth management to its clients. As of March 2019, it has approximately $50 billion worth of assets under its control. Given this stature, it is not a surprise to see that if the company does anything out of the ordinary, it makes headline news without making any effort.
But that also means that any major management changes which are going on inside of DE Shaw are also not hidden from the news. This was made evident when the firm parted ways with one of its star partners Daniel Michalow in March 2018.
From stories that leaked through the halls of DE Shaw, it was brought to surface that the firm had fired the managing director on the grounds of him being sexually inappropriate with female coworkers. Michalow had denied the allegations, coming back with a defense where he maintained that while he might be tough on his coworkers to make them more productive, he is not a pervert who would go to the lengths of sexual harassment.
At the time, it became an issue of DE Shaw vs. Michalow. A few months later, things haven’t changed one bit. On the contrary, they have only grown more intense.
Most recently, DE Shaw asked a few of its employees to get into non-compete contracts that would stop them from being poached by any other company. While this might sound like a regular practice, it holds greater meaning when you notice that Michalow’s parting contract that stops him from hiring or partnering up with DE Shaw employees to create his hedge fund ended on September 15, 2019.
Some employees have agreed to DE Shaw dictating the terms for them. While others are still on the fence, all in all, the coinciding timings are highly indicative of DE Shaw thinking that Michalow would reach out to his former coworkers to form his own hedge fund.
Most importantly, it highlights that if Michalow’s former coworkers, especially women, are accepting of working with him again, then he might not have been the pariah that DE Shaw touted him to be.
At the time of writing, the events remain very interesting, to say the least. Only time will tell where they lead this saga of DE Shaw vs. Michalow.