Rentech is popular for only hiring PhDs in physics and statistics and other extremely hard subjects – and Simons is one particular of the most famous mathematicians in the globe. Brian Hunter’s stellar efficiency with Amaranth Advisors proves that the industry is inefficient and brilliant investors can beat the industry by massive amounts. Bill Miller’s stellar efficiency with the Legg Mason Value Trust proves that the marketplace is inefficient and brilliant investors can beat the market by massive amounts. Shut down your shabby indexing scheme when you have 5 million and head to the holy medallion fund, where everybody will quickly be a billionaire, if not a trillionaire.
For what it is worth, the other Renaissance funds like the Institutional Equities Fund (which holds positions for a number of quarters, typically) do not appear to be performing all that abnormally. This figure shows the distribution of annualized Info Ratios of all actively managed equity funds on the CRSP mutual fund database with at least 30 years of return history. As far as how Effectively should an investor-funded hedge fund: there is a strict upper bound for that. Renaissance is older than LTCM and has lasted much longer, generating income to this day.
Seemingly the techniques used are distinct, even though maybe some are related in notion (convergence trading is quite frequent in the hedge fund world, right after all). It’s challenging to say precisely, as specifics of Renaissance’s very best and most renowned fund are closely guarded. It is nicely identified – primarily based on each public and private comments – that Renaissance strength is not high frequency trading. Medallion does not have IP, wish, or the infrastructure necessary to trade like that.
However, it is really most likely that Medallion has techniques with a turnover from 100% per day to ten% per day. My hypothesis is that Medallion is performing a mixture of trading and investing, and doing that quite properly. The WSJ reports that, amongst other items, the SEC has been not too long ago poking around RenTec’s books, perhaps attempting to answer the $64,000 query of how Medallion regularly outperforms RIEF and RIFF. P.S. Renaissance recently updated its Form ADV Element II, as necessary by the SEC. The Nova Fund, an aggressive, market-neutral hedge fund trading U.S. equities using statistical arbitrage.
Organized, staffed and directed the enterprise unit which traded the fund till February 1995. In 1997 this fund was absorbed into the Medallion Fund, the firm’s flagship multi-method fund. As we’ve highlighted in the previous, Rentec’s internal Medallion Fund has generated outstanding efficiency numbers Even though many hedge funds charge 2% management and 20% functionality charges, Medallion was said to charge five% and 44% at 1 time.