Renaissance Hedge Fund Down 7 Percent

Discussion in 'Wall St. News' started by nidarian, Aug 12, 2007.

  1. nidarian


    NEW YORK (Reuters) - The Renaissance Institutional Equities Fund, a $26 billion-plus hedge fund managed by mathematician James Simons, is down "in the order of 7 percent" for the year through Aug. 8, according to a letter the fund sent to investors Thursday.

    Renaissance, one of the largest "quantitative" hedge funds, told investors that it has "not had good luck during these last few days." It said it has been "caught in what appears to be a large wave of de-leveraging on the part of quantitative long-short hedge funds."

    Results for the past two trading days since the letter went out early Aug. 9 could not be obtained.

    It also said results for July were "quite disappointing," with returns down between 4 percent and 4.5 percent, according to the letter that was obtained by Reuters.

    Renaissance is a pioneer in the use of mathematical models that rapidly trade stocks in a strategy that is backed by debt, or leverage.

    Simons' success in his other fund, Medallion, has made him among the highest paid managers in the $1.7 trillion industry, taking home an estimated $1.7 billion in 2006. Both funds are part of Renaissance Technologies Corp., based in East Setauket, New York.

    Other major quantitative funds, AQR Capital Management, D.E. Shaw & Co., Goldman Sachs (NYSE:GS) Global Alpha, and Tykhe Capital have also suffered in the recent market downdraft prompted by a widening crisis in the subprime-mortgage lending market, sources briefed on the matter told Reuters.

    "All the quant managers are having trouble now, because their models are based on past events, and we haven't seen markets exactly like these before," said Brad Alford, a portfolio manager at Alpha Capital Management in Atlanta, whose clients' investments include hedge funds.

    Simons said both the markets and his systems were behind the declining returns for Renaissance Institutional Equity, but he said he expects the fund to recover.

    "While much of the damage was due to weak markets, our system experienced meaningful relative losses during the first two weeks of the month," said Simons in the letter.

    But he said the fund is "in the final stages of release" for three "very promising new signals," or components to trading models, that should help the fund "ultimately produce attractive rewards."

    Renaissance declined to comment.,GGLJ:en&q=renaissance+hedge+fund+down+
  2. 0008


    He is my idol!:D
    If he cannot make money I think I had better go to holiday!:cool:
  3. dont


    Anytime you see anyone running opm in more than one fund it has to be to exploit survivorship bias.

    But when you have $1.7bln opm what me worry:p