aiCIO Editorial: DE Shaw and the Lost City of El Dora-Dough

Quant hedge fund DE Shaw, which recently laid off a significant portion of it’s real estate division, is getting some ribbing in the press for the partial cause of those layoffs: the recent foreclosure on a tract of New Mexico desert twice the size of Boston. Shaw put up $100 million of the quarter-billion purchase price, and needs to start coughing up payments quickly or risk losing their entire investment. Given the size of the blunder, the teasing has been warranted, if overdone, but it will only get worse once the rest of the blogosphere finds the best piece of (unintentional) comedy in the whole transaction.

In a four page press release that reads like DE Shaw had just defeated Santa Anna’s army and manifested their own destiny, the deal is extolled as “one of the most significant land transactions in recent history,” by Shaw’s real estate guru — one that could “reshape…potentially the entire Southwest.”

Bubble-era quote schadenfreude isn’t new, but it’s still fun…

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Figures released by the Pension Protection Fund show the funding shortfall faced by the UK's defined benefit pension schemes more than halved in September.

(October 13, 2010) — The funding shortfall facing defined benefit pension schemes in the UK has improved to a deficit of £20.4 billion ($32 billion) at the end of September, compared to a deficit of £53.5 billion at the end of August.

The recovery — measured from a survey of 6,653 schemes in the Pension Protection Fund’s (PPF) 7800 index — has been driven by rising stock markets as well as an increase in gilt yields, which reduced pension liabilities by 0.5%.

In total, according to the lifeboat fund, 4,420 schemes, around two-thirds of all defined benefit pensions, remained in deficit at the end of the month, 300 fewer than at the end of August. Furthermore, the funding position of all schemes was also better than in September last year, when the schemes faced a collective deficit of £98.8 billion.

The PPF said the funding ratio improved from 94.6% to 97.9% month over month, while total assets came to £961.8 billion – an increase of 3% over the month and an increase of 9.3% over the year. Total liabilities were £982.2 billion – a decrease of 0.5% over the month and an increase of 0.3% over the year.

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To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742