D.E. Shaw's top shareholder activist Koffey leaves hedge fund

(Reuters) – Hedge fund manager Quentin Koffey, who joined D.E. Shaw & Co two years ago from Elliott Management Corp to lead its shareholder activism strategy, has left to join Senator Investment Group LP, the firms told Reuters on Thursday.

The move is a setback for D.E. Shaw, which is seeking to emulate Elliott as a generalist hedge fund with strong activist leanings, advocating for major changes at companies, such as putting themselves up for sale.

Some funds are using activism to distinguish themselves with strategies that cannot be replaced by cheaper index funds, as investors spurn hedge funds with high fees and lackluster returns, pulling out billions from the $3 trillion industry.

Koffey left D.E. Shaw this week and no replacement has been announced internally, people familiar with the matter said. He will start work in July at Senator, an 11-year-old hedge fund which specializes in so-called event-driven investing such as mergers, one of the sources added.

“We do not expect any material changes to our activist positions due to Quentin’s departure,” D.E. Shaw spokesman Randall Whitestone said by email. “Activism is an important tool that we will continue to use when necessary to create shareholder value.”

“As the pace of change in business accelerates, there is a compelling opportunity for us to work collaboratively with management teams to help them strengthen their businesses and create value for shareholders,” Senator founders Alexander Klabin and Douglas Silverman said in an emailed statement.

Koffey could not be reached for comment.

D.E. Shaw, known for its computer-driven trading, became a bigger presence in

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