Multistrategy hedge fund DE Shaw is raising capital for DE Shaw Diopter International Fund II as well as its counterpart, DE Shaw Diopter Fund II, according to a report by Institutional Investor citing regulatory filings.
According to an Institutional Investor source, DE Shaw hopes to tap the growing market for synthetic securitisations and other capital optimisation instruments, which hit an unprecedented peak in 2023 with a compound annual growth rate of around 25%.
The Diopter II Fund will target investments in capital relief, risk sharing and synthetic securitisations, focusing on transactions that provide regulatory capital relief and enhance financial institutions’ lending capacities.
DE Shaw’s inaugural Diopter Fund concluded its fundraising last February with $650m.
The firm’s private credit investment unit and regulatory capital optimisation strategies will oversee Diopter II, with three managing directors from the firm’s discretionary credit businesses—Rich McKinney, Marianna Fassinotti and Steve Eilenberg—serving as co-portfolio managers.
D.E. Shaw has been active in synthetic securitisations since 2007, having so far committed approximately $4.2bn to over 40 such deals.
As of 1 March 2024, DE Shaw managed over $60bn in investment and committed capital, allocating more than $8bn to credit-related strategies, including approximately $2bn in private credit funds. The firm’s flagship multistrategy fund reported a 5.34% return for the year through April.
