Jim Simons
Photographer: Amanda Gordon / Bloomberg
Photographer: Amanda Gordon / Bloomberg
Renaissance Technologies, the investor giant that has just recorded its worst returns on its public funds, has been hit with at least $ 5 billion in amortization.
Customers earned $ 1.85 billion net among the three hedge funds in December and asked for $ 1.9 billion net in January, according to investor letters seen by Bloomberg. The letters indicate that investors are willing to pull out another $ 1.65 billion this month.
These figures could be offset if there are entries in February or if investors decide to back down on any of their redemption applications.
The company of billionaire Jim Simons, a pioneer in quantum investments, is having a difficult year. Its three public hedge funds recorded double-digit losses in 2020, as their algorithms were thrown out of danger by market changes that computers had never seen before. At the same time, its fund for employees and privileged increased 76% last year, the Institutional Investor reported.
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Renaissance’s institutional equity fund, the largest of its external vehicles, lost 19% in 2020, according to the letters. This fund obtained the largest piece of the redemptions. The Alpha Diversified Institutional Fund fell 32% and the Diversified Global Equities Institutional Fund fell 31%.
A spokesman for the New York-based firm in East Setauket declined to comment.
Renaissance communicated to customers in a September letter that their losses were due to be under cover during the March collapse and then over-covered in the April-June rebound. This happened because their business models were “overcompensated” for the original problem.
Renaissance again addressed his sad numbers in a December letter.
“While recent performance has been terrible and worse than previous performance would have suggested it would be likely by 2020,” the firm said, its model “predicts that in the trajectory as long as ours, there will be how many risk-return indices as bad as we are now seeing are not impactful. ” The broader lesson is that “you have to wait for even good investments to make horribly from time to time.”
Renaissance is the world’s largest quantitative hedge fund firm. It was founded in 1982 by Simons, a former National Security Agency code breaker. Last month, he announced that he would step down as president of the firm, which at the time managed about $ 60 billion. He will remain a member of the board.