Jim Simons
Photographer: Amanda Gordon / Bloomberg
Photographer: Amanda Gordon / Bloomberg
Renaissance Technologies, the investment giant that has just achieved its worst returns ever on its public funds, has been hit with at least $ 5 billion in redemptions.
Clients drew a net $ 1.85 billion across the three hedge funds in December and requested a net $ 1.9 billion in January, according to investor letters seen by Bloomberg. Investors plan to snatch another $ 1.65 billion this month, the letters show.
These figures can be offset if there is an inflow in February or if investors decide to push back their redemption requests.
Billionaire Jim Simons’ firm, a pioneer with many investments, is facing a difficult year. Its three public hedge funds posted double-digit losses in 2020 because their algorithms were eliminated by market fluctuations the computers had never seen before. At the same time, its fund for employees and insiders increased by 76% last year, reports Institutional Investor.
Read more: Human-Run Hedge Funds Beat Quants in the year ruled by pandemic
Renaissance’s Institutional Equities fund, the largest of external vehicles, lost 19% in 2020, according to the letters. The fund received most of the redemptions. The Institutional Diversified Alpha Fund decreased by 32% and the Institutional Diversified Global Equities Fund decreased by 31%.
A spokesman for the East Setauket, New York-based firm, declined to comment.
Renaissance told customers in a September letter that the losses were due to under-hedged during the March crash and then over-hedged in the rebound from April to June. This happened because the trading models ‘compensated’ too much for the original problems.
Renaissance once again addressed its bad numbers in a December letter.
‘Although recent performance has been terrible and worse than previous performance would have predicted, it is likely to be for 2020,’ the company said, ‘a number of returns are expected to be just as bad in the records we now see. , is not shocking. The broader lesson is that ‘one can expect even good investments to perform terribly from time to time.’
Renaissance is the world’s largest quantitative hedge fund business. It was founded in 1982 by Simons, a former code breaker of the National Security Agency. Last month, he announced that he was stepping down as chairman of the firm, which at the time managed about $ 60 billion. He will remain a board member.