DE Shaw adds 0.12% tech fee as assets reach $125bn

DE Shaw introduced a 0.12% technology surcharge for investors in its Composite strategy in 2026, Bloomberg first reported. Assets reached a record $125 billion, up from $98 billion at the start of the year.

The surcharge comes on top of the 3% management fee and 35% performance fee the firm already charges Composite investors. Bloomberg linked the new charge to rising costs of AI infrastructure and investment research. The $125 billion divides into roughly $90 billion in hedge fund strategies, $30 billion in long-oriented investments and $5 billion in private investments.

For fund selectors, the cost of a Composite allocation changed in 2026: the 12 basis point technology surcharge sits alongside the 3% management fee and 35% performance fee. Cogence, the firm's first fund run by human portfolio managers, has raised about $6 billion and carries investor lockups of up to four years.

The firm is deploying AI-powered research systems to process corporate information, analyze alternative datasets and identify shorter-term trading opportunities, replicating elements of the multistrategy pod model. Citadel, Bridgewater and Man Group have also been extending AI use in research, as Alternatives previously reported.

DE Shaw executives flagged the potential for forced liquidations to amplify market shocks and said the firm has avoided highly leveraged Treasury basis trades because of the risks during extreme volatility.

The employee-focused fund is due in January 2027. It reserves certain proprietary investment opportunities for staff and takes half its initial capital from Composite. Bloomberg described it as a retention measure as competition for quantitative talent intensifies from Citadel, Millennium and Jane Street.