Renaissance Technologies, one of the world’s largest and best-known hedge funds, has extended its recent run of poor performance and has recorded double-digit losses this year, according to investors.
Renaissance Technologies, the quantitative hedge fund firm founded by Jim Simons, lost almost 21% this year through the first week of June in its market-neutral vehicle.
Part of the decline for the Renaissance Institutional Diversified Alpha fund came this month amid volatility brought on by the coronavirus crisis, according to Bloomberg. The fund lost almost 9% in the first week of June.
Renaissance’s RIDA fund trades global stocks and runs a so-called ‘market-neutral’ portfolio that balances out bets on rising and falling prices. It also seeks to capitalise on trends and other patterns in futures markets.
A spokesman for the firm declined to comment on the returns, which were reported earlier by the Financial Times.
This year’s losses mark a U-turn in performance for RIDA, which has made money in each of the previous five calendar years, according to numbers sent to investors. The fund gained 4.2 per cent last year.
The firm’s quantitative equity hedge fund rose 2.3% in May, Bloomberg reported last week. The Renaissance Institutional Equities Fund, which only trades U.S.-listed stocks that its computer models expect to rise, was down 11% this year through May.
Renaissance, which oversaw about $75 billion as of earlier this year, has long been one of the $3 trillion hedge fund industry’s most profitable firms. The East Setauket, New York-based firm is best known for its Medallion fund, which is only open to executives and employees and has had annualized gains of roughly 40% over the past three decades.
The $75bn computer-driven fund firm, founded by former Cold War codebreaker Jim Simons, is having a difficult year navigating the increased market volatility brought on by the coronavirus pandemic.
Renaissance’s equities-focused funds were among some of the most high-profile casualties of the coronavirus-led market rout in early March, putting the firm on track for one of its worst annual performances. The firm declined to comment on the numbers.
The Long Island-based group had managed to pare back some of its earlier losses as markets recovered from the initial shock of a global economic shutdown to stem the pandemic, but its recent performance woes gave back those gains.
Founded by Mr Simons in 1982, Renaissance is one of the most influential and secretive firms in the hedge fund industry. Its flagship hedge fund Medallion was so successful that it ejected outside investors in 2005, and now just manages the money of the firm’s employees.
Financial markets have proved hard to time for many traders this year. The fallout from the pandemic provoked the US market’s fastest descent into bear market territory, before a massive wave of stimulus from global central banks and governments prompted a sharp rebound that briefly took the S&P 500 into positive territory for the year.
Gloss