New York-based multi-strategy hedge fund D.E. Shaw, with USD4.3 billion in capital under management, has hired Kevin Fox, former senior v.p. and general manager of commodity services at Aquila, to launch an energy trading operation. D.E. Shaw expects to trade both physically and financially settled energy contracts and has hired additional trading personnel, according to an official familiar with the fund's strategy. Fox, who is due to join the secretive hedge fund today, could not be reached for comment. Officials at D.E. Shaw in New York declined all comment.
Fox was described by one former Aquila official as something of a wunderkind, having set up a trading operation at the Kansas City, Mo., company that became the second largest in the U.S. Aquila started scaling down its trading operation and letting go traders in May in an effort to shore up its battered credit rating.
D.E. Shaw joins a growing number of hedge funds and financial institutions that are migrating to the energy trading markets, filling the shoes of old line utilities that have less experience with and appetite for managing volatile instruments, said market officials. This process has been accelerated by the capitulation of the energy industry's elite, such as Aquila and Enron, resulting in the dispersal of trading talent to hedge funds such as Citadel Investments and Tudor Investments, as well as to financial institutions such as Bank of America.
