Jim Simons
Photographer: Amanda Gordon / Bloomberg
Photographer: Amanda Gordon / Bloomberg
Renaissance Technologies, the investment giant that just posted its worst returns on its public funds, was hit with at least $ 5 billion in bailouts.
Customers withdrew $ 1.85 billion net from the three hedge funds in December and requested $ 1.9 billion in January, according to letters from investors seen by Bloomberg. Investors are expected to raise another $ 1.65 billion this month, the letters show.
These numbers can be offset if there are inflows in February or if investors decide to withdraw their redemption requests.
Billionaire Jim Simons’ company, a quantum investment pioneer, is coming out of a difficult year. Its three public hedge funds recorded double-digit losses in 2020, when their algorithms were thrown out of control by market fluctuations that computers had never seen before. At the same time, your fund for employees and insiders rose 76% last year, Institutional Investor reported.
Read more: Crash of human-managed hedge funds Quants in the year ruled by the pandemic
Renaissance’s institutional stock fund, the largest external vehicle, lost 19% in 2020, the letters show. This fund obtained most of the redemptions. Institutional Diversified Alpha fell 32% and Institutional Diversified Global Equities fell 31%.
A New York-based East Setauket spokesman declined to comment.
Renaissance told customers in a letter in September that their losses were due to under-hedged during the March collapse and then over-hedged in the April-June recovery. This was because their business models “overcompensated” for the original problem.
Renaissance again addressed its dismal numbers in a December letter.
“Although recent performance has been terrible and worse than previous performance, it would have suggested that it is likely for 2020,” said the company, its model “predicts that in histories as long as ours, some risk-return rates as bad as those that we are seeing now are not shocking. ”The broader lesson is that“ even good investments should be expected to perform horribly every now and then ”.
Renaissance is the largest quantitative hedge fund company in the world. It was founded in 1982 by Simons, a former National Security Agency code cracker. Last month, he announced that he is stepping down as president of the company, which was managing about $ 60 billion at the time. He will remain a board member.