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The Medallion Fund Is Still Outperforming. Other Renaissance Funds Still Aren’t.
The insider-only Medallion fund gained almost 10 percent in the first quarter.
Insiders at Renaissance Technologies, one of the world’s largest and most famous hedge funds, are still making bank.
Renaissance’s famed Medallion fund, which is available only to current and former partners, gained 9.7 during the first quarter, according to one of its investors.
The strong start to 2021 for Medallion follows its bang-up year of 2020, when the fund rose 76 percent, as Institutional Investor previously reported.
According to the Medallion investor, Renaissance is increasing the size of the fund by 10 percent.
“I was expecting to get a quarterly distribution; instead they asked for more capital,” he said. “That usually means they found more opportunities to invest. I suspect they found partners to give them more leverage.”
Medallion, he explained, “is capacity constrained; otherwise it dilutes the returns.”
At the end of the year the regulatory assets under management of Medallion, which includes leverage, amounted to $34.8 billion, according to its annual filing with the Securities and Exchange Commission.
Regulatory assets for the entire firm were $130.86 billion.
[II Deep Dive: Renaissance’s Medallion Fund Surged 76% in 2020. But Funds Open to Outsiders Tanked.]
Over the years, Medallion’s spectacular returns, as well as fees on the other funds, have made founder Jim Simons, who is now retired, a multi-billionaire and a perennial member of Institutional Investor’s Rich List. Last year he came in second on the list, earning $2.6 billion.
This year, Medallion is outdoing both the S&P 500 index, which gained 6.2 percent for the quarter, and HFR’s quant index, which rose 5.39 percent.
But the funds open to outside investors haven’t done nearly so well. The biggest fund open to outside investors, Renaissance Institutional Equities Fund, fell 4.36 through March after losing 20 percent last year, according to HSBC’s weekly scoreboard of hedge fund performance. That fund, however, appears to be recovering. It jumped 8 percent in the first half of April and is now up 4 percent year to date, according to an individual familiar with the performance.
Last year’s poor performance, however, led investors to flee. Investors yanked $1.85 billion out of three Renaissance hedge funds in December, according to Bloomberg, which reported that they also asked to pull another $1.9 month in January and $1.65 billion in February.
One of Renaissance’s hardest hit outside investors is the financially troubled Providence, R.I., pension system, as II previously reported.
Providence placed more than 9 percent of its total investment portfolio in the Renaissance Institutional Equities Fund, according to a report prepared by its advisor, Wainright Investment Counsel, a Rhode Island consultancy that advises the city on its pension investments. The report was presented to the city’s board of investment.
Representatives for Providence have told II that the board of investment commissioners “actively oversees the Providence Pension Fund’s management and will continue to reassess investments in any underperforming funds.”
A spokesman for Renaissance declined to comment.