Renaissance Technologies has witnessed at least $5 billion in redemptions since December 1, according to Bloomberg. The walkout comes after three funds open to the public fell by double digits last year and their computer models shattered by the rapid stock market crash.
- Renaissance is now trying to convince investors that it’s still worth their money and can be trusted to deliver market-beating returns.
- Renaissance, the world’s largest quantitative hedge fund, has built a reputation on its Medallion fund’s success, which has averaged about 40% returns a year since its founding in 1988.
- The fund’s success has made its founder Jim Simons one of the world’s richest people, with a fortune of about $23 billion.
- Medallion has been losing money after its first six months and underwent a revamp that led to its stunning performance.
- Renaissance removed outside investors in 2005 and sought to limit Medallion’s size after the company realized there were limits to the amount the fund could manage without pushing the markets too much.
- Despite massive withdrawals, analysts believe any inflows could offset the figures in February or if investors cancel their redemption requests.
- Renaissance anticipates getting back on track records despite the recent bad run of results.
Renaissance investors pulled out a net $1.85 billion across three public funds in December, requested a net $1.9 billion in January, and are expected to request another $1.65 billion this month.
