Renaissance Technologies’ equities fund–pioneered in 1982 by award-winning mathematician and former Cold War code breaker, Jim Simons–lost 9.5% through January 29, while its institutional diversified alpha fund lagged 5.4%. In December, Simons told investors he would step down as chairman at the beginning of 2021.
The decision comes after Renaissance funds open to outside investors dipped between 20% and 32% in 2020. The firm is well-known as one of the “most secretive and successful” hedge funds in the world, and their Medallion fund is famed for the best record in investing history, returning more than 66% annualized before fees and 39% after fees over a 30-year span from 1988 to 2018. Is that good?
Even hedge fund titan Bill Ackman’s Pershing Square squandered 3.2% in January, as did Man GLG’s innovation equity alternative fund. Crispin Odey’s absolute return fund finished red in January, with a 6.8% drawdown. However, It wasn’t all doom and gloom for Odey, his crown jewel European fund returned 9.2% as of January 29.
Back in 2004, hedge fund titan Bill Ackman sunk $54 million from his personal funds into starting up Pershing Square Capital Management. Then, eight years later in 2012, Pershing Square Capital Management launched a new closed-end fund called Pershing Square Holdings, which raised $3 billion in an October 2014 IPO on Amsterdam’s Euronext stock market. As a closed-end fund valued at $6.7 billion, Pershing was designed as a permanent capital vehicle from which investors would not be able to directly withdraw funds. PSH reported 17.1% in returns since inception under Ackman’s management, 80% below the S&P 500.
The leap in retail investing last month, particularly short interest stocks, threatened to upend equity markets and forced losses on some well known hedge fund players caught hanging out on the short side. Stocks masquerading as casino’s, such as GameStop [$GME] and AMC [$AMC], saw huge swings as pajama traders piled in en masse, catalyzed by Reddit’s WallStreetBets and facilitated by free-to-trade sites like Robinhood.