Trey Beck, head of investor relations for the $35 billion multistrategy investment firm D.E. Shaw & Co., is retiring from the hedge fund industry to focus on philanthropy. Alexis Halaby, a senior member of D.E. Shaw’s investor relations department and a 12-year veteran of the firm, will take on Beck’s role.
Halaby has spent more than six years in D.E. Shaw’s IR group. She was previously a fixed-income trader at the firm. Halaby joined D.E. Shaw in 2003 after earning a BS degree in biological sciences, with a minor in economics, from Stanford University.
Beck, 43, joined New York–based D.E. Shaw 22 years ago, having graduated from the University of Virginia with a dual degree in history and Russian studies just two days before his start date at the firm. He had a job offer to be a teacher in his native Houston but wanted to live in New York.
Despite the lack of a financial degree or background, the hedge fund firm hired him as an associate, which involved rotating through a variety of administrative roles including librarian, receptionist and mailroom clerk. “I viewed it as an amazing job at a firm I vaguely understood,” Beck says.
At the time, D.E. Shaw managed about $300 million, including seed money from its initial investor, Donald Sussman’s Paloma Partners. The firm began a strategic relationship with Bank of America in 1997, but that relationship wound down after BofA was acquired by NationsBank in 1998.
That was the same year that D.E. Shaw and many others suffered big losses in the Russian fixed-income crisis. D.E. Shaw then decided to grow and diversify its investor base, and Beck was named to launch a new investor relations team.
“In the beginning it was just two people, and today our group has 35 people,” Beck says. “Our model was to integrate marketing and client servicing.”
For the past 17 years, Beck has been responsible for overseeing D.E. Shaw Group’s investor relations and external affairs departments, in addition to being involved in the development of the group’s overall business strategy.
“In the earliest days, we struggled with the perception that we were a quant shop, which was complicated and hard to understand,” Beck concedes, referring to the firm’s use of computer-driven investment strategies, also known as quantitative investing.
It was not the only challenge Beck faced. He and his team had to reassure existing and prospective investors that it was not a big deal when firm founder David Shaw decided in 2002 to hand over day-to-day operations to the firm’s then six-person executive committee, although today Shaw remains active in the firm’s major strategic decisions. And following the global financial crisis of 2008, the firm enforced gate provisions for certain funds, which did not sit well with some investors. From 2008 through 2010 assets plummeted by nearly 40 percent.
But Beck and his team persevered. Today the firm’s hedge fund and alternative assets are up by about two thirds from where they stood in 2010, with the firm managing $25 billion in multistrategy, macro and other alternative-investment vehicles. Another roughly $10.5 billion is managed in the firm’s institutional asset management business, which offers mostly quantitatively driven long-only and 130/30 equities strategies. D.E. Shaw was the 12th-largest hedge fund firm in the world at the beginning of 2014.
Today a large portion of its investors are pension plans and large, bank-owned funds of funds. This means Beck and his team have had to become more client friendly, providing much more transparency about the firm’s investment process and risk management systems, and holding quarterly conference calls with investors.
Now, with the firm “in a great position to flourish,” Beck has decided to retire and devote a big portion of his time to philanthropic endeavors such as Turnaround for Children, a New York–based philanthropy focused on improving poverty-affected public schools.
