David E. Shaw

David E. Shaw
David E. Shaw
Born	March 29, 1951 (age 75); Los Angeles, California, U.S.
Occupation(s)	Scientist, hedge fund executive
Years active	1980–present
Known for	Founder of D. E. Shaw & Co., computational biochemistry research

David Elliot Shaw (born March 29, 1951) is an American billionaire scientist and ex-hedge fund executive. He established D. E. Shaw & Co., a hedge fund once characterized by Fortune as "the most captivating and enigmatic presence on Wall Street". Previously an assistant professor of computer science at Columbia University, Shaw amassed his wealth by capitalizing on market inefficiencies through sophisticated high-speed computing networks. In 1996, Fortune labeled him "King Quant" for his groundbreaking work in rapid quantitative trading. By 2001, his interests pivoted towards computational biochemistry research, with a focus on molecular dynamics simulations of proteins.

Early life

Shaw was raised in Los Angeles, California. His father was a theoretical physicist specializing in plasma and fluid dynamics; his mother was an artist and teacher. Following their separation when Shaw was 12, his stepfather, Irving Pfeffer, became a finance professor at University of California, Los Angeles and published research endorsing the efficient market hypothesis.

He graduated summa cum laude from the University of California, San Diego with dual majors in mathematics & applied physics and information science. Shaw completed both an MSc and PhD at Stanford University in 1980 before joining Columbia University as an assistant professor in computer science. His research there involved massively parallel computing using the NON-VON supercomputer, engineered for fast relational database queries. Prior to this, he had founded Stanford Systems Corporation.

Investment career

In 1986, Shaw took on the role of Vice President for Technology at Morgan Stanley, working within Nunzio Tartaglia's automated proprietary trading division. In 1994, President Clinton appointed him to the President's Council of Advisors on Science and Technology, where he chaired the Panel on Educational Technology. From 2000 to 2010, he served as treasurer for the board of the American Association for the Advancement of Science. In 2007, Shaw was inducted as a fellow of the American Academy of Arts and Sciences. President Obama reappointed him to the President's Council of Advisors on Science and Technology in 2009. He gained election to the National Academy of Engineering in 2012 and to the National Academy of Sciences in 2014.

D. E. Shaw

Shaw launched the hedge fund D. E. Shaw & Co in 1988, utilizing proprietary algorithms for securities trading. By 2018, Forbes valued his net worth at $6.2 billion. He holds positions as a senior research fellow at Columbia University's Center for Computational Biology and Bioinformatics and as an adjunct professor of biomedical informatics at Columbia's medical school. Additionally, he acts as chief scientist at D. E. Shaw Research, concentrating on computational biochemistry.

Institutional Investor's Alpha magazine reported that D. E. Shaw generated $530 million in earnings during 2014, placing it among the top 25 hedge funds by profit alongside firms like Renaissance Technologies led by James H. Simons, who earned $1.2 billion that year. Both are pioneers in quantitative strategies and founders of algorithm-driven trading firms.

Political and philanthropic contributions

Shaw has contributed $2.25 million to Priorities USA Action, a super PAC backing Democratic presidential hopeful Hillary Clinton, along with $1 million directed to Organizing for Action.

By 2014, through the Shaw Family Endowment Fund, he and his wife had each donated $400,000 to both the Stephen Wise Free Synagogue and the Memorial Sloan Kettering Cancer Center, as well as $800,000 to the Horace Mann School.

Between 2011 and 2017, the Fund consistently granted $1 million annually to each of Yale University, Stanford University, Harvard University, and Princeton University, in addition to $500,000 per year to both Columbia University and Brown University. These higher education donations represented more than 60% of the Fund’s total giving—amounting to $37.3 million—during the years when Shaw’s three children were applying to colleges. Notably, two of his children gained admission to Yale.

Shaw has also held a position on the board of the American Association for the Advancement of Science.

Personal life

In 1993, Shaw wed personal finance expert and journalist Beth Kobliner. Both are Jewish members of New York’s Stephen Wise Free Synagogue. The couple has three children—two sons and a daughter—and they live in New York City. In 2014, Shaw acquired several properties in Westchester County, New York, which he merged into a prominent estate.

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