Every day, the boundaries blur between private equity and hedge funds. Hedge funds are imposing more illiquid terms on investors and seeking returns in the nonpublic universe. And traditional private equity behemoths like Kohlberg Kravis Roberts & Co. and Blackstone are rolling up hedge funds.
D.E. Shaw is in the process of dedicating a small, segregated portion of its multi-strategy hedge fund to private equity or illiquid investments, according to a person familiar with the matter. The firm, to be fair, is not new to private equity investing. Its partners have been engaged in a variety of private deals for a decade. They injected capital in Juno Online Services prior to its becoming public in 1999, for instance. But now the plan is to allocate a portion of hedge fund capital to private equity investments, which is slightly different.
