Jim Simons may be an investment genius, but he’s no $100 billion man. The Renaissance Institutional Equities Fund, once billed by Simons’ Renaissance Technologies as the first hedge fund capable of managing that staggering amount, is currently making do with a lot less.
The strategy hit a low of $5.1 billion at midyear, a sharp drop from the $7.4 billion it managed at yearend 2008, and well below the nearly $21 billion it managed at yearend 2007. Renaissance’s firmwide assets fell to $17 billion on July 1, down from a peak of $34 billion in January 2008.
RIEF’s drop is more a result of redemptions than poor performance, with the fund (offshore, Series B) down 13.05% this year through June 30 while assets declined 31%. RIEF aims to beat the S&P 500 by 4 to 6 percentage points, and has done so over time, with an annualized loss since inception to July 31 of 1.15% versus a decline of 5.42% for the S&P 500. But RIEF has significantly underperformed the Standard & Poor’s 500 Index this year, down 9.72% vs. an S&P 500 gain of 9.33%, after beating the S&P by 22.19 percentage points in 2008.
The fund launched in August 2005 with a bang, earning 4.98% its first partial year and 21.42% in 2006. Those numbers juiced fundraising as investors apparently thought RIEF might be a back door to the long-closed Medallion fund, which gained 80% in 2008. The Medallion fund has been closed since the 1990s and reputedly holds only partner money. In November 2006, RIEF had to cap subscriptions at $2 billion a month. But RIEF lost 0.37% in 2007 and remains negative. Investor redemptions followed, aided by monthly liquidity. Renaissance did not impose a gate.
Renaissance’s other institution-focused fund, Renaissance Institutional Futures Fund, has also suffered, falling to $2.3 billion at midyear from $3 billion at yearend 2008. RIFF is down 1.87% for the year through July 31 and fell 12.91% in 2008. JF
THE TALLY FOR RENAISSANCE
Renaissance AUMs by strategy
Date | RIEF | RIFF | Firmwide |
Dec.05 | 2.61 | 8.70 | |
Jun.06 | 6.94 | 12.10 | |
Dec.06 | 16.05 | 24.00 | |
Jun.07 | 26.52 | 29.20 | |
Oct.07 | na | 1.32 | na |
Dec.07 | 20.90 | 34.00 | |
Jun.08 | 12.65 | 1.03 | 29.00 |
Dec.08 | 7.40 | 3.00 | 20.00 |
Jun.09 | 5.10 | 2.30 | 17.00 |
RIIF Performance
Launch: October 2007
2007 | 6.30% |
2008 | (12.91%) |
2009 | (1.87%) |
RIEF Performance
Launch: August 2005
2005 | 4.98% |
2006 | 21.42% |
2007 | -0.37% |
2008 | -16.72% |
2009 | -9.72% |
