In October, Renaissance Technologies’ two public institutional funds suffered their worst monthly losses in recent memory, plunging the quant funds into the red for the year.
The Renaissance Institutional Equities Fund dropped 14.39 percent in October. It is now down 7.5 percent for the year, according to a hedge fund database and another source familiar with the fund. The Renaissance Institutional Diversified Alpha Fund lost 15.6 percent last month and is off 10.3 percent for the year.
Renaissance declined to comment.
The RIEF funds, a global, quantitative, long-biased strategy, aim to beat the S&P 500 Index while maintaining a relatively low beta to the index of 0.4 or lower, as well as lower volatility than the index, a regulatory filing details. The funds are expected to have a long-term average leverage of about 2.5 to 1.
The RIDA funds trade stocks with the aim of maximizing long-term returns while meeting a standard deviation target.
Both strategies can use stock index futures or stock index option contracts to reduce risk. And both can hold significant individual positions that the firm warns “can be difficult to exit quickly without affecting their prices.”
On December 31, 2023, the Renaissance Institutional Diversified Global Equities funds were merged with the RIDA funds.
RIDA and RIEF are coming off very strong years.
In 2024, RIDA, which currently manages about $2.8 billion, posted a 15.6 percent gain, its best performance since the fund’s inception in 2021, according to the database. Last year, RIEF jumped 22.7 percent, its best year since 2011, when it added 34 percent. RIEF currently manages just under $20 billion, down from nearly $36 billion at the beginning of 2020.
Renaissance was founded by James Simons, who died in 2024 at 86. The Setauket, New York–based firm currently has about 300 employees, including 90 PhDs in math, physics, computer science, and related fields.
Renaissance, of course, is best known for its legendary Medallion Fund, which closed to outside investors in 2005. Little is known about it these days except a few facts that have trickled out. From 1988 to 2021, the fund, which employs a short-term, quantitative trading strategy across multiple asset classes, generated a 66 percent annualized return before fees, or 39 percent after fees; it has a 4 percent management fee and a performance fee of 36 to 44 percent.
Renaissance Kaleidoscope Fund is a fund of funds for employee and employee-related investors that currently invests in each of the Medallion, RIEF, and RIDA fund families.
