Renaissance Technologies

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Renaissance Technologies LLC
Industry Investment Management
Founded 1982 (1982), New York
Headquarters East Setauket, New York, United States
Key people
AUM US $ 22 Billion (2012)
Number of employees
275[2] (2009)

Renaissance Technologies is an American hedge fund management company that operates three funds.[2] It operates in East Setauket, Long Island, New York, near Stony Brook University with administrative functions handled in Manhattan.


Started in 1982 by James Simons, Renaissance currently has more than $22 billion[3] in assets under management across its Renaissance Institutional Futures Fund (RIFF), Renaissance Institutional Equities Fund (RIEF), DAF (Diversified Alpha Fund) and Medallion Fund. Since its inception in 1988 to 1999, the company's $3.3 billion Medallion Fund claims to have averaged over 35% annual returns after fees. The Medallion Fund is closed to new outside investors since 1993.[4] Simons retired at the end of 2009.

Renaissance charges a management fee of 5% and a profit participation of, initially 36%, and now 44%, both of which are higher than the industry standard of 2% and 20%, respectively.[5]


The Medallion Fund has traded non-stock instruments and is international. American-traded instruments include commodities futures and US Treasury bonds. Foreign-traded instruments include currency swaps, commodities futures, and foreign bonds. The Medallion Fund has its own internal trading desk, staffed by approximately 20 traders, and trades from Monday opening bell in Australia through Friday closing bell in the US. Its origins date to the late 1980s, and it is believed to have essentially subsumed the trading positions and intellectual property of James Ax's Axcom Trading Advisors after that company's dissolution in 1992.[citation needed]

The Nova Fund has traded NASDAQ stocks only, executing purely electronically, with a desk staffed by 1–2 traders overseeing operations. In the mid-1990s, Nova was one of Instinet's largest volume customers. On one day in 1997 Nova executions accounted for 14% of the share volume of the NASDAQ.[citation needed]

The Renaissance Institutional Equities Fund started in mid-2005 and is offered as a fund for institutional investors. Renaissance manages a number of other funds in various markets, including mortgage-backed securities and funds of external managed funds like the Renaissance Return Fund.[citation needed]

Investment strategy[edit]

For more than twenty years, Simons' Renaissance Technologies hedge fund, which trades in markets around the world, has employed complex mathematical models to analyze and execute trades, many of them automated. Renaissance uses computer-based models to predict price changes in easily traded financial instruments. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions.[5] Some also attribute Renaissance performance to employing financial signal processing techniques such as pattern recognition. The Quants describes the hiring of speech recognition experts, many from IBM, including the current leaders of the firm.

Renaissance employs staff with non-financial backgrounds, including mathematicians, physicists, astrophysicists and statisticians. About a third of the 275 employees at the East Setauket office have Ph.Ds.[5]

Like many other quantitative funds, their RIE Fund had difficulty with the higher volatility environment that persisted throughout the end of the summer of 2007. According to an 10 August (2007) article in Bloomberg by Katherine Burton, "James Simons's $29 billion Renaissance Institutional Equities Fund fell 8.7% in August 2007 when his computer models used to buy and sell stocks were overwhelmed by securities' price swings. The two-year-old quantitative, or 'quant', hedge fund now has declined 7.4 percent for the year. Simons said other hedge funds have been forced to sell positions, short-circuiting statistical models based on the relationships among securities."[6]

On 25 September 2008, Renaissance wrote a comment letter to the Securities and Exchange Commission, discouraging them from implementing a rule change that would have permitted the public to access information regarding institutional investors' short positions, as they can currently do with long positions. The company cited a number of reasons for this, including the fact that "institutional investors may alter their trading activity to avoid public disclosure".[7]


  • Jim Simons, Founder, President & CEO
  • Peter Brown, co-CEO[8]
  • Robert Mercer, co-CEO
  • Gudjon Hermansson, Production Manager, Medallion Fund.
  • Robert Lourie, Head, Futures Research
  • Nathaniel Simons, Principal, Vice Chairman, and Director[9]
  • George Zweig

Renaissance alumni[edit]


  1. ^ Smythe, Christie; Mider, Zachary (17 July 2013). "Renaissance Co-CEO Mercer Sued by Home Staff for Over Pay". Bloomberg News. Retrieved 11 October 2013. 
  2. ^ a b required)
  3. ^ "Is Renaissance Technologies Falling off the Mark?". Institutional Investor's Alpha. Retrieved 30 January 2013. 
  4. ^ "The Secret World of Jim Simons" (PDF). Institutional Investor Magazine (Americas and International Editions). Retrieved November 1, 2000.  Check date values in: |access-date= (help)
  5. ^ a b c d Teitelbaum, Richard (2008-10-27). "Simons at Renaissance Cracks Code, Doubling Assets". Bloomberg. Retrieved 2014-10-01. 
  6. ^ Burton, Katherine (2007-08-10). "Renaissance's Stock Hedge Fund Falls 8.7% in August". Bloomberg News. Retrieved 2014-10-01. 
  7. ^ "Comment Letter from Renaissance" (PDF). S.E.C. Retrieved 2009-06-02. 
  8. ^ Schroeder, Robert (22 July 2014). "Hedge fund dodged over $6 billion in taxes: senators". MarketWatch. Retrieved 2014-07-22. 
  9. ^ "Nathaniel Simons: Executive Profile & Biography". BusinessWeek. Retrieved 2011-10-14. 
  10. ^ Julia C. Mead (1 March 2006). "Metro Briefing | New York: Port Jefferson: Couple Identified In Murder-Suicide". The New York Times. Retrieved 1 October 2014. 
  11. ^ "Math Ph.D. Alumni". Pennsylvania State University.  Shows 2003 affiliation with Renaissance. Retrieved 2014-08-02.

External links[edit]