Jim Simons' Renaissance Technologies has suffered an $11 billion outflow of client funds in seven months as investors have tired of its poor performance, Bloomberg reported, citing investor documents.
Simons, a former NSA codebreaker and MIT math professor, founded RenTech in 1982 and built it into one of the world's largest and most successful quantitative hedge funds. While the internal Medallion Fund has continued to shine, RenTech's three public funds delivered their worst performance ever in 2020, and trailed the broader market in the first five months of this year, Bloomberg said.
The weak showing spurred RenTech clients to withdraw a net $10.1 billion in the four months to April 30, ask to redeem $700 million in May, and request to pull out another $400 million this month, Bloomberg said. The exodus of cash has slashed the largest public fund's assets by more than 25% since last June, and cut the other two funds' assets by 40% to 50% each, the news outlet added.
RenTech's bosses admitted to clients in December that the three funds were underhedged when the pandemic struck last spring, and overhedged when the stock market bounced back in the second quarter of 2020. They expressed regret about the disappointing returns at the time, but defended themselves by saying that even the best investments perform poorly sometimes.
Simons resigned as RenTech's chairman in January, but still sits on the firm's board. He closed the Medallion fund to outside money in 2005 after realizing too much capital hampered its ability to outperform.
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