DE Shaw announced today that David Lyon will join the special situations/distressed private equity department of the firm’s private equity arm. Lyon will head the department alongside senior vice president Patrick Collins, who joined the firm late last year.
Lyon was formerly a managing director of The Cypress Group, a private equity firm based in New York. Cypress was formed in 1998 by four former members of Lehman Brothers’ erstwhile private equity arm. Cypress made early investments in Wesco, an electrical supply distributor, and Cinemark USA, a movie theatre chain. Two of the founding partners have since departed.
Collins came to DE Shaw from Mizuho International, the securities and investment banking arm of the Mizuho Financial Group, where he was the head of the special situations and distressed investment team. Prior to that he worked at Merrill Lynch as the head of its distressed trading business in London.
Before joining Cypress, Lyon worked in the mergers-and-acquisitions department of the New York-based Goldman, Sachs & Co., and then at another New York hedge fund, Och-Ziff Capital Management.
DE Shaw has been gradually moving into private equity. Over the last few years, the firm has backed a number of distressed buyouts, including the New York and Las Vegas stores of toy retailer FAO Schwartz, the internet division of toy store chain KB Toys, and Allentown, Pennsylvania-based Surefit, a marketer and manufacturer of furniture covers.
In February of this year the firm announced the appointment of Liang Meng, formerly of JP Morgan, to head its private equity activities in China. In April of this year DE Shaw announced that it would launch a private equity fund outright, into which some of its previous investments would be moved.
DE Shaw is not the only hedge fund to expand into private equity. In April of 2006, Stamford, Connecticut-based SAC Capital Advisors launched a flexible private debt business. In February of this year SAC Capital also announced preparations to launch an Asia-focused private equity investment platform.
DE Shaw manages around $30 billion in aggregate investment capital. The firm has offices in North America, Europe, and Asia.