Who

Shaw is the secretive founder of D.E. Shaw, one of the world's largest hedge funds with more than $35 billion under management.

Backstory

A Stanford PhD and former faculty member in the computer science department at Columbia (his expertise was massively parallel supercomputing), Shaw turned to financial markets in the mid-'80s just when quants were starting to make an impact on Wall Street. After a two-year stint at Morgan Stanley, in 1988 Shaw headed off on his own, starting up his eponymous fund in a Greenwich Village loft above a Communist bookstore with $28 million in capital. (One of his original investors was Continental Casualty, the financial firm controlled by the Tisch family.) Although the fund didn't make a single trade during its first six months and endured a bumpy period in the late '90s in the wake of the Long-Term Capital Management debacle and the emerging markets crisis (Shaw slashed 25 percent of its workforce after sustaining massive losses), its returns have hovered around the 20 percent mark annually.

Of note

Like fellow hedge funder Jim Simons, Shaw typically hires mathematicians, computer scientists, and other quant jocks, and the employees use complex computer algorithms to detect and capitalize on price inequalities in the markets. Famously secretive, Shaw has long cultivated a mystique about his hiring practices—the firm claims that only 1 in 500 who apply are hired and that it prefers to hire Jeopardy champions, chess savants and expert blackjack players instead of MBAs.

In 2001, Shaw stepped down from day-to-day management of the firm to focus his attention on research once again, specifically the topic of computational biochemistry. (He's assembled a group of some 40 scientists and engineers and is hoping to make advances in the fight against cancer.) But he's widely believed to have a hand in the strategic direction of the firm, which in recent years has expanded operations with a push into the private equity arena. (One of its most public deals was the 2004 acquisition of the toy retailer FAO Schwartz.) In March 2007, Dick Fuld's Lehman Brothers acquired a 20 percent stake in the fund for an undisclosed—but undoubtedly very hefty—sum. Shaw's timing worked out nicely: Months later, the mortgage meltdown battered D.E. Shaw's funds, leading to mediocre returns for the year. Although Shaw's Oculus fund was up, the firm's $22 billion flagship composite fund returned just 7.4 percent after fees.

Keeping score

Shaw takes home the single biggest chunk of the firm's profits, and earned between $400-$500 million in 2005, according to Trader Monthly. He did even better in 2007, pulling in $770 million according to Forbes, which pegged his net worth at $2.7 billion.

For the record

D.E. Shaw's most famous alum? Jeff Bezos, the founder of Amazon.com, who came up with the idea for the online retailer while working for Shaw. Amazon wasn't the only dotcom hatched at Shaw's Midtown office. In the late 1990s, company employees started Juno, the free e-mail provider.

Campaign trail

Shaw is a liberal Democrat and pal of Bill Clinton; Shaw once served on the former president's council of advisors on science and technology. Another Bill connection: Lawrence Summers, the Secretary of the Treasury under Clinton and a former president of Harvard, is now on the Shaw payroll as a part-time managing director.

Personal

The notoriously press-shy billionaire is married to Beth Kobliner Shaw, a financial journalist and former Money staff writer who has written two books about personal finance. They live in the West 60s.