D.E. Shaw & Co. will lay off 264 employees-about 25% of it work force- and sell several business units in anticipation of severing its ties with BankAmerica Corp., the firm announced Wednesday.
The New York-based hedge fund and securities firm said it began looking for a partner or buyer for its financial products group last week. It also said Wednesday that it has spun off certain assets of its "third market" subsidiary-a unit that makes over-the-counter trades of exchange-listed stocks- to Trimark Securities Inc. of White Plans, N.Y.
It plans to discontinue its own third market activities at Dec. 31.
D.E. Shaw also said it plans to close its California office but to retain regional offices in Boston, London, Tokyo, Hong Kong, and Hyderabad, India.
In addition, the firm plans to seek a buyer for subsidiaries FarSight Financial Services, an on-line brokerage, and D.E. Shaw Financial Technology, which develops Internet technology for financial institutions.
After these moves D.E. Shaw would be focused on its institutional business and extensive proprietary trading operations, said Nicholas Gianakouros, a vice president.
The firm established a strategic partnership with BankAmerica before it merged with NationsBank Corp. Sept. 30. Though the agreement remains in effect until the end of 2000, certain D.E. Shaw businesses will be moved outside the alliance in the coming year, the firm said.
Meanwhile, Wasserstein Perella & Co. continues to look for a partner or buyer for Shaw's financial products group, which employs about 180 people. The group houses the firm's businesses in equity derivatives and in global convertible bonds and warrants.
The new BankAmerica does not require an outside partnership for equity derivatives. NationsBank invested heavily during the year before the merger in a derivatives group at Montgomery Securities, its San Francisco investment banking subsidiary.
Wasserstein Perella is not involved in the divestiture of any other D.E. Shaw unit.