D.E. Shaw & Co. is taking steps to prevent additional capital from entering its Lithic fund, potentially closing the vehicle to new money as soon as next month, according to reporting that cites people with knowledge of the situation. The Lithic fund manages more than $5 billion.
The move reflects a growing pattern within the hedge fund industry of managers turning away fresh cash even as some investor appetite for hedge fund strategies has been re-ignited. A representative for New York-based D.E. Shaw declined to comment on the report.
On the firm level, D.E. Shaw oversees assets totalling more than $90 billion. Its flagship multistrategy funds, Composite and Oculus, have been closed to new investors for some time. The firm is preparing changes to redemption terms for those funds, extending the waiting periods for clients seeking to withdraw all of their capital to four years for Composite and three years for Oculus, according to the reporting.
In addition to restricting inflows and adjusting withdrawal timetables, D.E. Shaw is also taking steps to wind down two smaller multistrategy funds, named Valence and Multi-Asset Fund. Those closures and the liquidity changes add to the suite of actions the firm is taking as it manages capacity and investor access across its multistrategy platform.
Taken together, the measures at D.E. Shaw illustrate a calibration of fund access and liquidity terms at a major multi-manager. Closing a fund to new money, extending full-withdrawal windows and shuttering smaller vehicles are tools managers use to preserve portfolio flexibility and manage scale constraints, particularly in multi-asset and multistrategy operations.
Context and implications
While the report provides specific details about timing, scale and the targeted funds, it does not include additional commentary from the firm beyond a declined request to comment. The precise operational or portfolio reasons for each decision were not provided in the reporting and remain limited to the facts described above.