Wall Street billionaire David E. Shaw has applied his broad, risk-averse strategy to his children's college admissions process. eyywa and DanLGolden report
Illustration: Tomi Um This story is a collaboration between New York and ProPublica, an independent nonprofit newsroom. ProPublica research reporter Doris Burke contributed to this story.
He has even devised a model to protect his family from the possibility of loss or disappointment in that most uncertain of contemporary futures markets — namely, the college-admissions process. Like other couples of ample means, Shaw and his wife, financial journalist Beth Kobliner, have sent their three children to an elite prep school, supported them with hyperqualified nannies and tutors, and encouraged their extracurricular interests.
As Parke Muth, an independent counselor and former associate dean of admissions at the University of Virginia, explained, the very wealthy “are accustomed to diversifying their investments, and they apply that same philosophy to their kids’ choices.” To fill its storied ranks, D.E. Shaw & Co. depended on the same criteria elite colleges use in their own admissions processes. No matter one’s age or status, every applicant — from secretarial workers to traders lured from top mathematics and physics departments — had to submit their SAT scores. “It was incredibly insulting to recruit professors from MIT and ask them for their SAT scores and high-school GPA,” a recruiter recalls.
Shaw left the hedge fund in 2001 to found D.E. Shaw Research, which applied computer simulations to the arduous process of drug development. At both places, former employees said Shaw cared about saving time almost as much as he cared about minimizing risk. “The one thing you can’t get back is his time,” a former employee who worked at the hedge fund recalled. “So you spend as much of your time to get him back his time.
Hiring for Shaw staff was done separately from that of the firm but was comparably rigorous.
Shaw staffers confirmed that the standard was as Meriwether depicted it: perfection. Those who didn’t measure up suffered the consequences. Meriwether, who joined Shaw staff as a 22-year-old Yale graduate, was fired after forgetting to put snacks — bottled water and Asian pears sliced a quarter of an inch thick — into the car that picked the children up from school, according to two people familiar with the incident.
Conversations around choosing classes and clubs were tied to which would be most useful for college applications. Among her extracurriculars, Rebecca founded the Anti-Bullying Leadership Network. The summer before applying to college, she organized a conference on bullying at the City University of New York’s Graduate Center auditorium, where she spoke alongside leading academics and experts.
Shaw and Kobliner’s giving strategy was a lawful — if exceedingly more expensive — response to the same upper-class angst. In essence, they created multiple back doors. At a time of renewed debate about whether colleges are vehicles of social mobility or a means of reproducing class privilege, such a philanthropic adaptation suggests that the ultrarich won’t easily surrender their advantages.
Their favoring of institutions they didn’t attend runs counter to the traditional practice of wealthy Americans. When donors have no previous ties to a university, explained Brown, the former director of gift planning at Princeton, gifts are usually restricted to a specific academic purpose, such as funding a research program in their field of interest or a friend’s faculty chair.
“It’s obvious he picked the four schools he’d rather get into with a million dollars a year and the lesser schools with half a million a year,” said Zabel, the former head of Princeton’s planned-giving advisory committee. “If it didn’t help at Yale, he wouldn’t mind if it helped at Princeton. It’s pretty clear he’s hedging his bets.
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