Renaissance Hit with $ 5 billion in buybacks since December 1

Photographer: Amanda Gordon / Bloomberg

Renaissance Technologies, the investment giant that just posted its worst returns on public funds, has been hit with at least $ 5 billion in buybacks.

Clients drew $ 1.85 billion net on the three hedge funds in December and asked for $ 1.9 billion net in January, according to letters to investors seen by Bloomberg. Investors are set to recover an additional $ 1.65 billion this month, according to the letters.

These numbers could be offset if there were entries in February or if investors decided to reverse one of their redemption requests.

The company of billionaire Jim Simons, a pioneer in quantitative investing, has just had a difficult year. Its three public hedge funds posted double-digit losses in 2020 as their algorithms were thrown off balance by market swings computers had never seen before. At the same time, its fund for employees and insiders climbed 76% last year, Institutional Investor reported.

Read more: Man-run hedge funds beat How in the year governed by the pandemic

Renaissance’s Institutional Equities fund, the largest of the external vehicles, lost 19% in 2020, according to the letters. This fund obtained the majority of redemptions. The Institutional Diversified Alpha fund fell 32% and the Institutional Diversified Global Equities fund fell 31%.

A spokesperson for the East Setauket, New York-based company declined to comment.

Renaissance told its customers in a September letter that its losses were due to undercover during the March collapse, then overcover during the April to June rebound. This happened because its business models “overcompensated” for the initial problem.

Renaissance again addressed its dismal numbers in a December letter.

“While recent performance has been terrible and worse than previous performance might have suggested, was likely for 2020,” the firm said, its model “predicts that in a track record as long as ours, certain risk ratios – performance just as bad as the ones we are seeing now are not shocking. The more general lesson is that “even good investments are to be expected to behave horribly from time to time.”

Renaissance is the world’s largest quantitative hedge fund company. It was founded in 1982 by Simons, a former codebreaker for the National Security Agency. Last month he announced he was resigning as chairman of the company, which at the time managed around $ 60 billion. He will remain on the board.