RenTech Won’t Ax Institutional Funds

Sep 14 2010 | 11:34am ET

Renaissance Technologies has decided against shuttering its only two funds still open to outside investors.

The Long Island hedge fund giant’s new CEOs, Peter Brown and Robert Mercer, in March said they would consider closing the Renaissance Institutional Equities and Renaissance Institutional Futures funds. The two funds, launched with great fanfare in 2005 and 2007, have proven a disappointment and have badly lagged Renaissance’s flagship Medallion Fund, which is open only to employees and a handful of others.

But the two funds, which manage about $6.5 billion in assets, down from about $30 billion three years ago, have staged something of a turnaround this year. RIFF is up some 14% and RIEF 6% through August after the firm transferred staff from Medallion to the quantitative funds.

Both funds are well ahead of the average hedge fund, which has returned roughly 2% this year. But Medallion is still lapping them; it is up 22% this year.

In a letter to investors, Brown and Mercer, who took over from Renaissance founder James Simons at the beginning of the year, did say they would cut fees to “somewhat more competitive” levels, The Wall Street Journal reports. The funds currently charge 0.5% for management and 10% for performance.


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