As part of its 10% staff reduction this week, hedge fund D.E. Shaw has cut “most ofthe firm’s venture capital group,” according to Dan Primack of Fortune. Primack says D.E. Shaw has decided to “halt all future investments in venture capital, due to its long-term investment horizons.”
Three senior staffers remain on board in the venture unit, including group head Alex Wong, according to the report. The trio — which is charged with managing the exising portfolio and making select follow-on investments — is “also also is on the hunt for new funding sources, although it’s unclear if D.E. Shaw would participate out of a future capital pool,” Primack reports.
D.E. Shaw has been an active venture investor over the past six years. It isn’t clear if the hedge fund will sell its portfolio on the secondary market.
Since 2004, D.E. Shaw has made 34 investments , or an average of more than five a year for the past six years, according to Thomson Reuters, publisher of peHUB.
This year along, it has invested in four companies: Altierre Corp., which develops wireless business solutions for consumer retail chains; Infinite Power Solutions, which makes thin-film lithium-polymer rechargeable batteries for RFID chips and other uses; Offerpal Media, , which develops monetization platforms for social networks and virtual worlds; and PGP Corp., which develops secure messaging and data encryption solutions for enterprise data protection.
In Febuary, it joined with DCM, Intel Capital and Venrock Associates in a $13.75 million round for PGP, which has raised $59.6 million to date.
In March, it teamed with InterWest Partners and North Bridge Venture Partners for an undisclosed round in Offerpal. (The three firms previously did a $15 million Series B for Offerpal in February 2009.)
In April, it joined ATA Ventures in a $9.98 million investment in Altierre, which has raised a total of $68.5 million in venture capital to date.
And in August, D.E. Shaw participated in a $20 million Series C round for Infinate Power along with Applied Ventures, Core Capital Partners, Generation Investment Management, Polaris Venture Partners and undisclosed firm. (Infinite Power has raised about $68 million in total VC to date.)