D.E. Shaw Cuts Fees After Disappointing Year

Feb 16 2011 | 3:54am ET

D.E. Shaw & Co. will cut its fees by more than 16%, offering a break to investors who pay substantially more than the industry standard two and 20.

The New York-based firm, which manages $19 billion, will cut its management fee to 2.5% from 3% and its performance fee from 30% to 25%, Reuters reports. The move comes after D.E. Shaw disclosed returns of just 2.45% for its flagship last year, less than one-quarter the return of the average hedge fund.

The firm has also been aggressively cutting costs, laying off 150 people, or 10% of its total workforce. D.E. Shaw manages less than half of the $40 billion it ran at its peak in 2008.


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