D.E. Shaw Plans $1 Billion Fund to Target Credit Dislocations

D.E. Shaw & Co. plans to raise about $1 billion for its latest private-equity style fund that targets opportunistic investments in credit, as the firm jumps on market dislocations caused by the Covid-19 crisis.

New York-based D.E. Shaw has already raised about $618 million in commitments for its Alkali Fund V, which invests in loans, securitized products and other credit instruments, according to filings Wednesday. The firm started gathering the money in the second quarter and is planning additional fund closings in the next few months, according to a person with knowledge of the matter who asked not to be identified because the details are private.

A spokesman for D.E. Shaw, a pioneer in quantitative investing that runs more than $50 billion, declined to comment.

Several money managers are gathering fresh capital to take advantage of credit opportunities amid the unprecedented market dislocations sparked by the pandemic. Blackstone Group Inc., Oaktree Capital Group LLC and Carlyle Group Inc. are among those seeking to take advantage of the turbulence.

D.E. Shaw has also been collecting capital for some of its other funds. The firm amassed $2 billion in commitments for the flagship Composite hedge fund after opening its doors to new capital for the first time in seven years.

The Alkali funds, which have a five-year time horizon, raised a total of $2.5 billion since the series launched in 2012. The fourth fund completed its capital-raising last year with $940 million in commitments, according to the person.

Rich McKinney, who leads D.E. Shaw’s asset-backed strategies team and oversees the corporate credit investment unit, and Marianna Fassinotti, who heads the debt and related assets area within the ABS team, will jointly run the new fund.

©2020 Bloomberg L.P.

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