Renaissance Technologies founder James Simons is finding that being bigger doesn’t always add up to better returns. The Long Island, N.Y.-based hedge fund, long a top asset attracter and top performer, is putting the brakes slightly on the former as it skids a little on the latter. Here’s what’s happened. Renaissance has quadrupled its assets to $16 billion since the beginning of the year and set a $20 million minimum for one of its successor funds. But, managing the mound of money became increasingly difficult, Reuters reports, as its Institutional Equities Fund ended November at -1.5%, following a lackluster September (+1.68%) and October (+1.24%). As this year wore on, it appears, performance suffered. “This is prima facie evidence that there are capacity constraints even on the bet products,” Ted Aronson of Aronson+Johnson+Ortiz told Reuters. And Aronson should know, because last year his $30 billion quantitative hedge fund--the same type as Renaissance--experienced a similar scenario and closed its most popular fund. Which is why Renaissance is following suit and, according to an individual close to the firm, it is shutting the doors to outside investors. This person said in an interview with Reuters that Renaissance is now attempting to “take in money in a controlled, reasonable manner” so that it can better manage it. This new tack may put a kibosh on Renaissance’s much-heralded announcement last year that it was shooting to raise $100 billion, observers say, who predict the final tally will come in much lower than originally planned.
