RenTech May Pull Plug On Institutional Hedge Funds

Mar 16 2010 | 1:58pm ET

The new heads of Renaissance Technologies may shutter its only funds open to outside investors.

Peter Brown and Bob Mercer, who took over from RenTech founder James Simons in January as co-CEOs of the $16 billion Long Island firm, may shut down its Institutional Equities Fund and Institutional Futures Fund, The Wall Street Journal reports. The two funds, launched to great fanfare in 2005 and 2007, respectively, have badly lagged the firm’s flagship Medallion Fund, which is only open to employees and a handful of others.

In 2007, the two funds held $30 billion, but that has fallen to just $6 billion today. Simons had predicted that RIEF could handle some $100 billion, far more than Medallion. But Medallion, with $10 billion, in now much bigger than its counterparts, and investors have expressed frustration with the older fund’s consistently better performance.

“If we assess that it’s not something that’s going to sell, then we’ll decide it’s not good to be in that business,” Brown told the Journal in his and Mercer’s first media interview.

The new bosses discussed closing the funds with the old boss, Simons, who remains chairman, in January, and they are in talks with investors.

“Other people’s money is like a lever on your anxiety,” Brown said.

But whether it closes the funds or not, it is clear RenTech isn’t going anywhere. At the firm’s campus in East Setauket, N.Y.—it also has an office in New York City—work is underway on new buildings for more of the firm’s hallmark, computers, as well as new offices and, maybe, a squash court for employees.


In Depth

Fund Focus: Asian Frontier Capital Offers U.S. Investors Access To Untapped Markets

Mar 2 2015 | 6:47am ET

Hong-Kong based asset manager Asian Frontier Capital is making a capital raising...

Lifestyle

Hedge Fund Manager Out as Minnesota Wild Minority Owner

Feb 25 2015 | 2:45pm ET

New York hedge fund manager Philip Falcone is no longer a minority owner of the...

Guest Contributor

Risk Management: The Due Diligence Challenge And Branding Opportunity

Mar 2 2015 | 8:41am ET

The hedge fund firms that make it easier for prospective investors to gain comfort...

 

Editor's Note