Renaissance Technologies is quietly enjoying its best year in recent memory.
Although much attention has been paid to the firm’s crumbling asset base and the death of founder James Simons earlier this year, one fund is enjoying its best year since its launch and another is poised to post its best results in 13 years.
Unfortunately, many of the quantitatively driven funds’ earlier investors didn’t stick around for the recovery.
For example, through October, the Renaissance Institutional Equities Fund was up 22.5 percent, according to a hedge fund database. This exceeds the 20.5 percent gain in 2021 and is the best year since 2011, when the fund climbed 34 percent.
RIEF has also made up the 19.4 percent drop it suffered in 2020. The fund, however, lost a lot of investors after that. Today it manages a little less than $20 billion, down from nearly $36 billion at the beginning of 2020, according to a knowledgeable source.
According to a regulatory filing, the global fund is a quantitative, long-biased strategy that aims to exceed the S&P 500 Index while attempting to maintain a relatively low beta to the index of 0.4 or lower, as well as lower volatility than the index. The RIEF funds are expected to have a long-term average leverage of about 2.5 to 1. The objective is for them be no more than $100 net long for each $100 of equity.
Meanwhile, Renaissance Institutional Diversified Alpha Fund is up 17.5 percent for the year through October, which is shaping up to be the best result since its March 2012 inception, per the hedge fund database. Even so, the fund is well below its high-water mark after suffering a 31.6 percent loss in 2020.
On December 31, 2023, the Renaissance Institutional Diversified Global Equities funds were merged with the RIDA funds. Today the combined fund manages just $3.6 billion, according to the source. Before 2020, RIDA managed $15 billion, and RIDGE $14.3 billion. The RIDA funds trade public equity securities with the objective of maximizing long-term return while attempting to meet a standard deviation target.
The star of the Renaissance show is the firm’s legendary Medallion Fund, which closed to outside investors in 2005. Little is known about it these days unless tidbits of information are leaked. We do know Medallion was up 76 percent in 2020. From 1988 to 2021, it generated a 66 percent annualized return before fees or 39 percent after fees.
Simons, who founded Renaissance Technologies’ predecessor firm in 1978, died in May 2024 at the age of 86.