At the end of January, when the Reddit revolt was wrecking havoc among hedge funds and forcing even market neutral quants to degross and delever, we pointed out something unexpected: according to the latest HSBC Hedge Fund performance tracker, Renaissance’s public funds – RIEF and RIDA – had a dismal 2020, losing 20% and 32% respectively, while the Renaissance Institutional Diversified Global Equities Fund (RIDGE) lost 31% as Rentec’s famous quant algos were thrown out of whack by swings the computers had never seen or experienced before (which is not to say that RenTec’s private, internal “friends and family-only” Medallion fund suffered a similar fate, quite the opposite).
This prompted us to ask “what the hell is going on in Setauket” (where RenTec’s HQ is located), a question which gained even more urgency once we found out that the dismal streak of the world’s largest quant fund (RenTec manages around $60BN) had continued into 2021, when its funds were the top and 5th worst performers overall in January (while Senvest was by far the best on the back of its $700 million gain from going long GME stock). Read more…..
Chart of the Day
Certain hedge funds were able to put up impressive returns amid the 2020 volatility. CNBC’s Leslie Picker reports on why this could be considered a comeback year for hedge funds.