Case Interview Question #00320: You are consulting to D. E. Shaw & Co., a global investment management firm based in New York City, New York, United States. The company is best known as a hedge fund that makes extensive use of quantitative technologies and qualitative trading strategies to manage its investments. The firm’s trading mode is systematic and computer-driven. The company also makes private equity investments in technology, wind power, real estate, and financial service firms and in distressed company financing.
The client D. E. Shaw & Co. provides investment management and financial advisory services to institutional clients, financial intermediaries, private clients, and investment vehicles around the world. Clients must invest a minimum of $1,000,000. This money will be invested by the client’s personal portfolio manager in stocks and bonds such that the portfolio created is in line with the client’s personal goals. The price they charged for portfolio management is 1 basis point plus an annual fee. The firm recently benchmarked other hedge funds and investment management firms. They found that their profitability was lower than the competition. What would you recommend the client to do to regain competitive advantage?
For this profitability and competitive benchmarking case, it is totally OK to know nothing about hedge fund or investment