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How do we know those returns are real? $1 million invested at the beginning would be worth $4.5 billion today at 35% return per year.
by sixQuarks 10y ago
How do we know those returns are real? $1 million invested at the beginning would be worth $4.5 billion today at 35% return per year.
- tedunangst 10y agoIt's not compounding.
- icedchai 10y agoIf it's like any other fund, it most certainly is.
- freyr 10y agoRead the article before jumping into an argument with uninformed speculation. They distribute profits to keep the fund capped at about $10B.
- icedchai 10y agoYeah, I read that. They don't tell you how often they raise the caps.
- giarc 10y ago>Renaissance currently caps Medallion’s assets between $9 billion and $10 billion, about twice what it was a decade ago. Profits get distributed every six months.
- icedchai 10y agoI can read, thanks. That doesn't answer the question. How often do they raise the caps? What happened before 10 years ago?
- giarc 10y agoIf it was $5b in 2006 and $10b in 2016 then you can speculate how often they raise it. Your prediction that $1 million would turn into $4.5b, and the fact that the fund sits at $10b clearly indicates they distribute profits more than they raise the cap.
- icedchai 10y agoThat wasn't my prediction, it was sixQuarks. All I'm saying is some percentage of the fund is left to compound.
- giarc 10y agoNo. So let's say it was $5b in 2006 and they were letting it compound. By 2016, at 35% interest compounding it would be worth over $100b. So by the simple fact that they raised the cap in 2016 to $10b (and the fund was not worth $100b) tells you that they are not letting it compound and as the article states, dividing the insane profits.
- Ameo 10y agoThey take money out of returns as fees, quite a large amount actually.
- infinite8s 10y agoThe reported 35% average annual return is net of fees.