David Elliot Shaw (born March 29, 1951) is an American billionaire scientist and former
hedge fund manager. He founded
D. E. Shaw & Co., a hedge fund company which was once described by ''
Fortune'' magazine as "the most intriguing and mysterious force on Wall Street".
A former assistant professor in the computer science department at
Columbia University
Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...
, Shaw made his fortune exploiting inefficiencies in financial markets with the help of state-of-the-art high speed computer networks. In 1996, ''
Fortune'' magazine referred to him as "King Quant" because of his firm's pioneering role in high-speed
quantitative trading
Mathematical finance, also known as quantitative finance and financial mathematics, is a field of applied mathematics, concerned with mathematical modeling of financial markets.
In general, there exist two separate branches of finance that require ...
.
In 2001, Shaw turned to full-time scientific research in computational biochemistry, more specifically
molecular dynamics
Molecular dynamics (MD) is a computer simulation method for analyzing the physical movements of atoms and molecules. The atoms and molecules are allowed to interact for a fixed period of time, giving a view of the dynamic "evolution" of t ...
simulations of proteins.
Early life and education
Shaw was raised in Los Angeles, California.
His father was a theoretical physicist who specialised in plasma and fluid flows, and his mother is an artist and educator.
They divorced when he was 12.
His stepfather, Irving Pfeffer, was professor of finance at
University of California, Los Angeles
The University of California, Los Angeles (UCLA) is a public land-grant research university in Los Angeles, California. UCLA's academic roots were established in 1881 as a teachers college then known as the southern branch of the California S ...
, and the author of papers supporting the
efficient market hypothesis
The efficient-market hypothesis (EMH) is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted bas ...
.
Shaw earned a bachelor's degree ''
summa cum laude'' from the
University of California, San Diego
The University of California, San Diego (UC San Diego or colloquially, UCSD) is a public land-grant research university in San Diego, California. Established in 1960 near the pre-existing Scripps Institution of Oceanography, UC San Diego is t ...
, a PhD from
Stanford University in 1980, and then became an assistant professor of the department of computer science at
Columbia University
Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...
. While at Columbia, Shaw conducted research in
massively parallel computing
Massively parallel is the term for using a large number of computer processors (or separate computers) to simultaneously perform a set of coordinated computations in parallel. GPUs are massively parallel architecture with tens of thousands of t ...
with the NON-VON supercomputer. This supercomputer was composed of processing elements in a
tree structure
A tree structure, tree diagram, or tree model is a way of representing the hierarchical nature of a structure in a graphical form. It is named a "tree structure" because the classic representation resembles a tree, although the chart is genera ...
meant to be used for fast
relational database searches. Earlier in his career, he founded Stanford Systems Corporation.
Investment career
In 1986, he joined
Morgan Stanley
Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...
, as Vice President for Technology in Nunzio Tartaglia's automated
proprietary trading
Proprietary trading (also known as prop trading) occurs when a trader trades stocks, bonds, currencies, commodities, their derivatives, or other financial instruments with the firm's own money (instead of using depositors' money) in order to m ...
group. In 1994, Shaw was appointed by President Clinton to the President's Council of Advisors on Science and Technology, where he was chairman of the Panel on Educational Technology. In 2000, he was elected to the board of directors of the
American Association for the Advancement of Science served as its treasurer 2000–2010. In 2007, Shaw was elected as a fellow of the
American Academy of Arts and Sciences
The American Academy of Arts and Sciences (abbreviation: AAA&S) is one of the oldest learned societies in the United States. It was founded in 1780 during the American Revolution by John Adams, John Hancock, James Bowdoin, Andrew Oliver, a ...
. In 2009, he was appointed by President
Obama
Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party (United States), Democratic Party, Obama was the first Af ...
again to the President's Council of Advisors on Science and Technology. In 2012, he was elected to the National Academy of Engineering and in 2014 was elected to the
National Academy of Sciences.
D. E. Shaw
In 1988 he started his own
hedge fund
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as s ...
, D. E. Shaw & Co, which employed proprietary algorithms for securities trading. In 2018, ''
Forbes
''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also r ...
'' estimated his net worth at $6.2 billion. He is also a senior research fellow at the Center for Computational Biology and Bioinformatics at
Columbia University
Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...
, and an adjunct professor of biomedical informatics at Columbia's medical school. Shaw is chief scientist of
D. E. Shaw Research, which conducts interdisciplinary research in the field of computational biochemistry.
According to the Institutional Investor's ''Alpha'' magazine's annual ranking for 2014,
D. E. Shaw, who made $530 million in 2014, and
James H. Simons of
Renaissance Technologies
Renaissance Technologies LLC, also known as RenTech or RenTec, is an American hedge fund based in East Setauket, New York, on Long Island, which specializes in systematic trading using quantitative models derived from mathematical and statisti ...
who made $1.2 billion were among the top 25 earners in the hedge fund industry. They are both "quantitative strategists who founded firms that build algorithms for trading."
Political and philanthropic donations
Shaw has donated US$2.25 million to
Priorities USA Action
Priorities USA Action is a progressive political action committee and is the largest Democratic Party super PAC. Founded in 2011, it supported Barack Obama's 2012 re-election campaign. It was the primary super PAC supporting Hillary Clinton' ...
, a
super PAC supporting
Democratic presidential candidate
Hillary Clinton
Hillary Diane Rodham Clinton ( Rodham; born October 26, 1947) is an American politician, diplomat, and former lawyer who served as the 67th United States Secretary of State for President Barack Obama from 2009 to 2013, as a United States sen ...
and $1 million to
Organizing for Action
Organizing for Action (OFA) was a nonprofit organization and community organizing project that advocated for the agenda of former U.S. President Barack Obama. The organization was officially non-partisan, but its agenda and policies were stron ...
.
[
Through the Shaw Family Endowment Fund, by 2014 he and his wife have donated $400,000 to the ]Stephen Wise Free Synagogue
Stephen Wise Free Synagogue is a Reform synagogue located at 30 West 68th Street in the New York City borough of Manhattan. The congregation was the first of multiple "free synagogue" branches in the early 20th century.
History Foundation
In 19 ...
, $400,000 to Memorial Sloan Kettering Cancer Center
Memorial Sloan Kettering Cancer Center (MSK or MSKCC) is a cancer treatment and research institution in the borough of Manhattan in New York City, founded in 1884 as the New York Cancer Hospital. MSKCC is one of 52 National Cancer Institute– ...
, and $800,000 to the Horace Mann School
, motto_translation = Great is the truth and it prevails
, address = 231 West 246th Street
, city = The Bronx
, state = New York
, zipcode = 10471
, countr ...
. From 2011 to 2017, the Fund annually donated $1 million to Yale University
Yale University is a Private university, private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the List of Colonial Colleges, third-oldest institution of higher education in the United Sta ...
, Stanford University, Harvard University
Harvard University is a private Ivy League research university in Cambridge, Massachusetts. Founded in 1636 as Harvard College and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of high ...
, Princeton University
Princeton University is a private research university in Princeton, New Jersey. Founded in 1746 in Elizabeth as the College of New Jersey, Princeton is the fourth-oldest institution of higher education in the United States and one of the ...
, and $500,000 to Columbia University
Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...
and Brown University. The college donations represent over 60% of the Fund's philanthropy. Shaw was on the board of the American Association for the Advancement of Science.
Personal life
Shaw is married to personal finance commentator and journalist Beth Kobliner. Shaw is Jewish
Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...
and he and his wife are members of the Stephen Wise Free Synagogue
Stephen Wise Free Synagogue is a Reform synagogue located at 30 West 68th Street in the New York City borough of Manhattan. The congregation was the first of multiple "free synagogue" branches in the early 20th century.
History Foundation
In 19 ...
in New York. They have three children, and live in New York City. In 2014, Shaw purchased several homes in Westchester County, New York
Westchester County is located in the U.S. state of New York. It is the seventh most populous county in the State of New York and the most populous north of New York City. According to the 2020 United States Census, the county had a population ...
and combined them into a mansion that received press attention.
See also
*List of computer scientists
This is a list of computer scientists, people who do work in computer science, in particular researchers and authors.
Some persons notable as programmers are included here because they work in research as well as program. A few of these people ...
* Computational chemistry
References
External links
D. E. Shaw Research
D. E. Shaw & Co. official website
New Architectures for a New Biology - a 2006 lecture by David E. Shaw for the Stanford University Computer Systems Colloquium
The Deal Weekly News
David E. Shaw
at Columbia Systems Biology
{{DEFAULTSORT:Shaw, David E.
1951 births
20th-century American Jews
American biochemists
American billionaires
American chief executives
American computer scientists
American hedge fund managers
American investors
American money managers
American philanthropists
American stock traders
Columbia School of Engineering and Applied Science alumni
Columbia University faculty
Stanford University alumni
University of California, San Diego alumni
Members of the United States National Academy of Engineering
Members of the United States National Academy of Sciences
Thinking Machines Corporation
Mathematical finance
Computational chemists
Living people
21st-century American Jews