Still Gung-Ho On Gonzo Hedge Fund?

It’s been more than a year since Renaissance Technologies announced the tantalizing news of creating a $100 billion hedge fund. Rome wasn’t built in a day and a monster like that will likely take a long time to achieve, but the firm is making progress. According to Reuters, the Renaissance Institutional Equities Fund has doubled its asset size in the past six months, bringing it to $8.5 billion, which ain’t hay, but light years away, it would seem, from reaching that lofty goal. On the other hand, maybe it doesn’t intend to. Reuters reports that the new fund has been “simulated” at the $100 billion size over several decades, leading the Long Island, N.Y.-based firm to state in its marketing material that “its size may be capped at any point where evidence suggests that further asset growth would produce unacceptable performance.” What is “unacceptable” is in the eyes of the beholder, or the hedge fund issuer. When the new fund launched, Renaissance said it was looking to replicate the success of the Medallion Fund, its flagship offering that has returned an average of 34% annually over the past 18 years. So far this year, the new fund – which will trade in U.S. equities – is up 21% net of fees. That’s viewed as a promising start for a fund that has a minimum investment of $20 million and from a firm that charges some of the industry’s highest fees.