May 2, 2011 / 7:36 PM / 8 years ago

Two Renaissance funds return to form in 2011

* Renaissance’s RIEF fund up 14 pct in 2011

* RIFF fund up 3 pct

By Svea Herbst-Bayliss

BOSTON, May 2 (Reuters) - Two Renaissance Technologies LLC portfolios, founded by mathematician turned hedge fund manager James Simons, have returned to form this year.

During the first four months of 2011 the Renaissance Institutional Equities fund, known as RIEF, has gained 14 percent, handily outpacing a 9 percent gain by the broader Standard and Poor’s 500 index, a source familiar with the fund’s returns said on Monday.

The Institutional Futures fund, known as RIFF, is up 3 percent through the end of April, also easily beating the average hedge fund, which is roughly flat, according to preliminary numbers from Hedge Fund Research.

The two portfolios are relative newcomers at the 29-year-old East Setauket, New York-based firm — RIEF was launched in 2005 while RIFF was started in 2007 — which relies mainly on computer programs to make trades. But they offer outside investors like pension funds are rare chance to put money into Renaissance, one of the industry’s most successful firms.

The firm’s Medallion fund, available primarily to insiders, posted average returns of about 45 percent between 1988 to 2010, people familiar with the numbers said.

Hedge funds generally keep their returns private and prohibit investors from discussing them publicly. Many firms are now notifying their investors of April returns.

About a year ago, however, talk swirled that RIEF and RIFF might be headed for the rubbish heap after a period of underperformance and client redemptions.

Early last year Simons, a septuagenarian who had long planned for his exit from the day to day operations, tapped two lieutenants, Peter Brown and Robert Mercer, to succeed him as Renaissance’s co-chief executives.

The pair openly discussed alternatives for the two funds.

But by mid-September, Brown and Mercer told investors that insiders had put more money into the funds and that other changes had been made to breathe new life into the funds. “We are reaffirming our commitment to the external funds business of Renaissance Institutional Management,” the pair wrote on Sept. 13.

At that time RIEF’s cumulative return since its launch was 4.55 percent. The fund ended 2010 with a 16.5 percent gain helping push its net return since inception to 33 percent now.

The RIEF fund oversees about $5.6 billion in assets while the RIFF fund has about $3.5 billion, said a person familiar with the fund, who was not authorized to speak publicly. (Editing by Steve Orlofsky)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below