4 ms·
This number has been cited often. This is not to be skeptical rather to crunch the claim: Suppose Rentech started with $50M AUM in 1994 (reasonable assumption
by noname123 6y ago
This number has been cited often. This is not to be skeptical rather to crunch the claim:
Suppose Rentech started with $50M AUM in 1994 (reasonable assumption for a small hedge fund); 50M * (1.718)^20 = 2.51 Trillion in 2014. What am I missing here?
- primitivesuave 6y agoIf you had a 10% return one year and a 90% return the next, for an average of 50%, your total principal would increase by 1.1 * 1.9 = 2.09. If you calculate by the average instead (1.5 * 1.5 = 2.25) the rate of return is higher, and that error may have compounded in your calculation.
- deleted 6y ago[deleted]
- robertk 6y agoThe Medallion Fund does not compound... the return is not re-invested into the principal but disseminated to investors annually. The strategy they play only works up to a certain level of capital.
- jackt89 6y agoThey have a maximum capacity of a few billion dollars in the fund. Every year they return the money they made so the fund stays the same size. Strategies don't scale indefinitely