The news surrounding Daniel Michalow’s departure from DE Shaw is again getting a lot of attention. This time it’s due to the actions of the hedge fund rather than the trader. While no formal announcement or press release has been made there is a lot of talk on the street about recent requests of the firm to their trading staff.
David Shaw’s hedge fund, DE Shaw, is now requiring its employees to sign binding non-compete agreements before September 16th. It appears that if the agreements aren’t signed the employee will need to leave the firm immediately. However, the employee will be able to take any deferred compensation with them if and when they leave. Many people believe that DE Shaw is put this measure into place to deal with the Daniel Michalow fallout.
As most in the financial industry know, Michalow was forced to leave DE Shaw in March of 2018. Spokespeople at DE Shaw state that the fact that the non-competes must be signed before Michalow’s “Interference Period” concludes is simply a coincidence. This timing does appear to many industry watchers to indicate that DE Shaw is concerned about Michalow poaching employees from the hedge fund and encouraging them to jump ship. It is not clear at this time if Michalow is forming his own hedge fund.
The entire situation, from the non-competes to the timing, has a lot of current DE Shaw employees wondering exactly what is happening behind the scenes. Several Managing Directors in leadership positions are beginning to feel a bit concerned about future compensation at the firm when speaking off the record.
All of this has many in the financial industry eyeing the firm from a different perspective as they wait to see what may be coming in the near future. It will be interesting to see what transpires in the months ahead.