Renaissance Technologies manages one of the most successful hedge funds of all time. It also manages what could be called the most disappointing hedge fund of all time.
It’s been five years since the Long Island quantitative firm unveiled its Institutional Equities Fund. The firm designed it to manage as much as $100 billion, but it’s never come close to testing that capacity. The fund currently manages only $6 billion—down from its $26 billion peak three years ago—and almost half of that comes from James Simons, the firm’s founder.
Why? Well, returns are a good place to start. The fund is down some 4.42% since its inception, according to the Financial Times. While the average hedge fund soared about 20% last year, RIEF lost 6%. Things haven’t gotten much better this year: The fund lost about 1.5% last month, although it has made up those losses this month, the FT reports.
All the while, Renaissance’s flagship Medallion fund, which manages money exclusively for firm employees, has continued its remarkable run of success, bringing gripes from RIEF investors. RenTech has pledged to pour more resources into RIEF, adding researchers to try to tackle the fund’s problems.
The fund has also been attracting investors, despite its sub-par performance. Inflows have returned after clients fled following the collapse of Lehman Brothers, according to the FT.