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Jim Simons and Renaissance Technologies

Posted: Mon Nov 04, 2019 10:56 pm
by Sam2
Last Saturday Wall Street Journal published an article about Jim Simons and how he started Renaissance Technologies. He is extremely bright mathematician and the history of his investment career is incredible. He beats everyone, including Warren Buffet.

I can't point to the article, as subscription required. Please check at your local library.

Sam

Re: Jim Simons and Renaissance Technologies

Posted: Mon Nov 04, 2019 11:13 pm
by nedsaid
I know Cliff Asness at AQR thinks very highly of Renaissance Technologies. Truly successful hedge funds are in the minority and it is an open question if hedge funds as a group are even worth consideration as an investment. Efforts at applying hedge fund techniques to retail mutual funds have met with not much success, I noticed yesterday that American Century is closing down two of its four retail Liquid Alt funds on January 24, 2020. The two funds being closed are AC Alternatives Disciplined Long Short Fund and AC Alternatives Market Neutral fund. Not a vote of confidence here. AQR and Cliff Asness come closest to bringing hedge funds to the masses but his fund group has come under a lot of criticism here. QSPIX, the AQR Style Premia Fund was heralded here early on and showed great promise but its performance has trailed off in recent years. The Liquid Alt funds for the most part have not beat even boring, old investment grade bonds. When I speak of hedge fund techniques, I am thinking of the use of leverage, shorting, and derivative instruments like options.

Re: Jim Simons and Renaissance Technologies

Posted: Mon Nov 04, 2019 11:27 pm
by Lucere

Re: Jim Simons and Renaissance Technologies

Posted: Tue Nov 05, 2019 12:03 am
by hdas
nedsaid wrote:
Mon Nov 04, 2019 11:13 pm
I know Cliff Asness at AQR thinks very highly of Renaissance Technologies. Truly successful hedge funds are in the minority and it is an open question if hedge funds as a group are even worth consideration as an investment. Efforts at applying hedge fund techniques to retail mutual funds have met with not much success, I noticed yesterday that American Century is closing down two of its four retail Liquid Alt funds on January 24, 2020. The two funds being closed are AC Alternatives Disciplined Long Short Fund and AC Alternatives Market Neutral fund. Not a vote of confidence here. AQR and Cliff Asness come closest to bringing hedge funds to the masses but his fund group has come under a lot of criticism here. QSPIX, the AQR Style Premia Fund was heralded here early on and showed great promise but its performance has trailed off in recent years. The Liquid Alt funds for the most part have not beat even boring, old investment grade bonds. When I speak of hedge fund techniques, I am thinking of the use of leverage, shorting, and derivative instruments like options.
Cliff Assness likes to insert his firm’s name in the same conversation regarding RenTech, which is a ridiculous proposition. Cheers :greedy

Re: Jim Simons and Renaissance Technologies

Posted: Tue Nov 05, 2019 12:05 am
by nedsaid
hdas wrote:
Tue Nov 05, 2019 12:03 am
nedsaid wrote:
Mon Nov 04, 2019 11:13 pm
I know Cliff Asness at AQR thinks very highly of Renaissance Technologies. Truly successful hedge funds are in the minority and it is an open question if hedge funds as a group are even worth consideration as an investment. Efforts at applying hedge fund techniques to retail mutual funds have met with not much success, I noticed yesterday that American Century is closing down two of its four retail Liquid Alt funds on January 24, 2020. The two funds being closed are AC Alternatives Disciplined Long Short Fund and AC Alternatives Market Neutral fund. Not a vote of confidence here. AQR and Cliff Asness come closest to bringing hedge funds to the masses but his fund group has come under a lot of criticism here. QSPIX, the AQR Style Premia Fund was heralded here early on and showed great promise but its performance has trailed off in recent years. The Liquid Alt funds for the most part have not beat even boring, old investment grade bonds. When I speak of hedge fund techniques, I am thinking of the use of leverage, shorting, and derivative instruments like options.
Cliff Assness likes to insert his firm’s name in the same conversation regarding RenTech, which is a ridiculous proposition. Cheers :greedy
He does say that Renaissance Technologies is better than AQR.

Re: Jim Simons and Renaissance Technologies

Posted: Tue Nov 05, 2019 12:20 am
by hdas
nedsaid wrote:
Tue Nov 05, 2019 12:05 am
hdas wrote:
Tue Nov 05, 2019 12:03 am
nedsaid wrote:
Mon Nov 04, 2019 11:13 pm
I know Cliff Asness at AQR thinks very highly of Renaissance Technologies. Truly successful hedge funds are in the minority and it is an open question if hedge funds as a group are even worth consideration as an investment. Efforts at applying hedge fund techniques to retail mutual funds have met with not much success, I noticed yesterday that American Century is closing down two of its four retail Liquid Alt funds on January 24, 2020. The two funds being closed are AC Alternatives Disciplined Long Short Fund and AC Alternatives Market Neutral fund. Not a vote of confidence here. AQR and Cliff Asness come closest to bringing hedge funds to the masses but his fund group has come under a lot of criticism here. QSPIX, the AQR Style Premia Fund was heralded here early on and showed great promise but its performance has trailed off in recent years. The Liquid Alt funds for the most part have not beat even boring, old investment grade bonds. When I speak of hedge fund techniques, I am thinking of the use of leverage, shorting, and derivative instruments like options.
Cliff Assness likes to insert his firm’s name in the same conversation regarding RenTech, which is a ridiculous proposition. Cheers :greedy
He does say that Renaissance Technologies is better than AQR.
Yes, that is exactly my point. While it sounds like a humble admisión, in reality is a blatant distortion of the truth. Just to make the comparison it’s disingenuous. Cheers :greedy

Re: Jim Simons and Renaissance Technologies

Posted: Tue Nov 05, 2019 1:41 am
by james22
In Appendix 1, Zuckerman painstakingly reconstructs the 30-year track record of the firm’s crown jewel, the Medallion Fund. Although rumors of its performance have long circulated on Wall Street and in the press, the actual numbers are even more mind-blowing: From 1988 to 2018, Medallion returned 66.1% annually before fees. Net of fees, the gains were 39.1%.

https://www.bloomberg.com/opinion/artic ... -fund-ever

Re: Jim Simons and Renaissance Technologies

Posted: Tue Nov 05, 2019 12:09 pm
by garlandwhizzer
Renaissance Medallion's success demonstrates that persistent investing skill exists as long as the asset base it tightly controlled. Only executives of Renaissance Technologies can invest in it which keeps its asset base at a level where it can be nimble and take advantage of opportunities that offer a great risk/return tradeoff but have limited asset capacity or are illiquid. This fund is run to maximize returns and to control its asset base so those returns will persist into the future. The public offerings that Renaissance has for regular people, RIEF and RIDA, have been markedly less effective with their quant models. The most promising investments Renaissance finds go into Medallion, what's left over goes into the public funds. As the article from The Financial Times suggests, Renaissance is now abandoning some of their formerly wildly successful quant strategies perhaps due to overcrowding in those strategies.

https://www.ft.com/content/23edf3ba-591 ... edca0a081a

So perhaps even geniuses running brilliant quant strategies may not keep the hidden alpha all to themselves forever. Jim Simons whose net worth is in excess of $21 billion isn't going to cry too much about that, but his success going forward is very unlikely to be as great as it has been in past decades.

Garland Whizzer

Re: Jim Simons and Renaissance Technologies

Posted: Tue Nov 05, 2019 1:24 pm
by Uncorrelated
I don't consider Renaissance Technologies a hedge fund. Their portfolio turnover is probably in the millions, I call that HFT.

Re: Jim Simons and Renaissance Technologies

Posted: Tue Nov 05, 2019 1:41 pm
by dodecahedron
Sam2 wrote:
Mon Nov 04, 2019 10:56 pm
I can't point to the article, as subscription required. Please check at your local library.
Lots of us *do* have subscriptions. (In my case, it is free due to institutional subscription by my part-time employer.)

Here is the link:

https://www.wsj.com/articles/the-making ... 1572667202

Thanks for pointing the article out, by the way. Jim Simons long fascinated my late husband. The article is adapted from a new book which is available as of today. I knew about the book, but not the article.