4 ms·

Renaissance hedge fund loses 20% this year

32 points by chirau 6y ago

kratom_sandwich 6y ago
Note that this is the performance of the Renaissance Institutional Diversified Alpha fund, not the well-known Medallion fund
viburnum 6y ago
They’ll quietly close the losing fund and start fresh with a new one.
- smabie 6y ago
  Why do you think that? RenTech has been pretty stable in its fund offerings over the last 20 or so years. It's not like Simons to simply close the fund and start over from one bad year. Though, I'm sure the investors are very upset, as one is usually relying on the pure alpha part of their portfolio to have the lowest volatility and be the rock they can weather market downturns with. To make matters worse, often times investors cut their bond allocations for pure alpha in order to eek out a little bit higher return. T-notes have done very well, with yields dropping like a rock. It must hurt to have all your supposedly uncorrelated allocations all tank at the same time!
- notfromhere 6y ago
  Medallion is such a money printing machine I wonder why tbey bother taking outside capital rather than just being a secretive prop shop
  - smabie 6y ago
    Probably because Medallion is capped out at 10bn and Simons need some other place to put his money.
  - chirau 6y ago
    Medallion no longer takes outside capital. It has been that way for several years now.
pietrovismara 6y ago
...good?
smabie 6y ago
Thinking at first this was the Medallion fund, I thought a 20% loss would be unthinkable. But it's just their RIDA fund. Actually, it appears that their Medallion fund is was up 24% since start of year to April: https://www.institutionalinvestor.com/article/b1l98yt4p0bvr4/The-Famed-Medallion-Fund-Is-Crushing-It-Other-RenTech-Funds-Not-So-Much https://www.institutionalinvestor.com/article/b1l98yt4p0bvr4.... It's pretty surprising that RIDA has dropped 20% since start of year, considering it's market neutral and presumably neutral to style and sector factors. This kind of fund shouldn't even be able to lose that much money is so short a time span, it simply wouldn't be possible in almost all market conditions. But then again, the kind of equity movements we've seen since March have been entirely unique: now equities are primarily exposed to the "coronavirus factor", a novel factor that has never existed, not been considered, before.

32 points by chirau 6y ago

Note that this is the performance of the Renaissance Institutional Diversified Alpha fund, not the well-known Medallion fund

viburnum 6y ago

They’ll quietly close the losing fund and start fresh with a new one.

smabie 6y ago
Why do you think that? RenTech has been pretty stable in its fund offerings over the last 20 or so years. It's not like Simons to simply close the fund and start over from one bad year. Though, I'm sure the investors are very upset, as one is usually relying on the pure alpha part of their portfolio to have the lowest volatility and be the rock they can weather market downturns with. To make matters worse, often times investors cut their bond allocations for pure alpha in order to eek out a little bit higher return. T-notes have done very well, with yields dropping like a rock. It must hurt to have all your supposedly uncorrelated allocations all tank at the same time!
notfromhere 6y ago
Medallion is such a money printing machine I wonder why tbey bother taking outside capital rather than just being a secretive prop shop
- smabie 6y ago
  Probably because Medallion is capped out at 10bn and Simons need some other place to put his money.
- chirau 6y ago
  Medallion no longer takes outside capital. It has been that way for several years now.

pietrovismara 6y ago

...good?

smabie 6y ago

Thinking at first this was the Medallion fund, I thought a 20% loss would be unthinkable. But it's just their RIDA fund. Actually, it appears that their Medallion fund is was up 24% since start of year to April: https://www.institutionalinvestor.com/article/b1l98yt4p0bvr4/The-Famed-Medallion-Fund-Is-Crushing-It-Other-RenTech-Funds-Not-So-Much https://www.institutionalinvestor.com/article/b1l98yt4p0bvr4.... It's pretty surprising that RIDA has dropped 20% since start of year, considering it's market neutral and presumably neutral to style and sector factors. This kind of fund shouldn't even be able to lose that much money is so short a time span, it simply wouldn't be possible in almost all market conditions. But then again, the kind of equity movements we've seen since March have been entirely unique: now equities are primarily exposed to the "coronavirus factor", a novel factor that has never existed, not been considered, before.