D. E. Shaw & Co., L.P. is a multinational investment management firm founded in 1988 by David E. Shaw and based in New York City. The company is known for developing complicated mathematical models and sophisticated computer programs to exploit anomalies in the financial market. D. E. Shaw & Co. manages $55 billion in AUM, $35 billion of which are alternative investments and the remaining $20 billion long-oriented investments (as of June 1, 2021). In 2018, Institutional Investor reported that among hedge funds, D. E. Shaw & Co. had delivered the fifth-highest returns in the world since its inception. History 1988 - 1996 - Founding & early years The company was founded by David E. Shaw, a former Columbia University faculty member with a doctoral degree from Stanford. D. E. Shaw began investing in June 1989, having secured $28 million in capital from Paloma Partners Management Co. and a couple of private investors. The company's first office was small and located above a bookstore near New York University. By 1990, the company had moved to a loft on Park Avenue South, and it relocated again the following year to Tower 45 on West 45th Street. From the start, the company carefully protected its proprietary trading algorithms. Many of its early employees were scientists, mathematicians, and computer programmers. The focus of recruiting broadened to include liberal arts graduates in early 1992. David Shaw has also placed heavy emphasis on risk management and the preservation of capital. Portfolio managers were expected to perform risk analysis. Eventually, the company would charge an executive committee and a chief risk officer with using scenario analysis and stress-testing to analyze risk at both the strategy and portfolio levels. In 1994, the company's net return was 26 percent. It managed several hundred million dollars in "market-neutral strategies, including statistical arbitrage, Japanese warrant arbitrage, convertible-bond arbitrage and fixed-income trading." Its non-hedge fund activities in the mid-90s included setting up a broker-dealer subsidiary, founding the e-mail provider Juno Online Services, launching an online banking and brokerage firm, and opening an office in India focused on developing software and systems to support the company's trading operations and online businesses. 1997 - Strategic alliance with Bank of America In 1997, the firm returned capital to most of its early investors in favor of a structured credit facility of nearly $2 billion from Bank of America, with terms that allowed D. E.