DE Shaw, a US hedge fund, is looking to create a private equity fund into which some of its existing private equity investments, like New York toy store FAO Schwartz, would be moved, according to The Financial Times. Lehman Brothers is reported to have bought a 20 percent stake in the fund.
The overlap between the hedge fund and private equity markets has been increasing. It was recently reported that US buyout house The Carlyle Group has launched a $1 billion hedge fund business called Blue Wave. TPG, another US buyout house, recently launched a $2.8 billion hedge fund with ex-Goldman Sachs executive Dinakar Singh.
Founded in 1988, DE Shaw manages about $29 billion and has offices in the US, the UK and India.