Renaissance Quant Fund Slumps 9.5% in January Stock Upheaval

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ARenaissance Technologies stock fund slumped in January, adding to the quant-investment giant’s woes after it suffered heavy losses in pandemic-hit markets.

The Renaissance Institutional Equities Fund fell 9.5% in the month, according to people with knowledge of the matter, who asked not to be identified because the information is private. That follows a20% loss last year for the fund, which is the largest of three that the firm sells to outside investors.

A spokesman for the East Setauket, New York-based firm founded by billionaire mathematician Jim Simons declined to comment.

The setback for one of the industry’s best-known hedge fund firms underscores thecontinued troubles for quant firms. Their trading models were thrown off by market swings as Covid-19 battered the global economy and central banks unleashed unprecedented stimulus to contain the carnage.

Renaissance, which oversees $60 billion, hasdropped out of a ranking of the world’s 20 most profitable hedge fund firms after some of its public funds fell more than 30% last year. It’s not clear what caused the Institutional Equities Fund’s January loss, which compares with a 1% drop in the S&P 500 index.

The U.S. stock market in January saw a battle erupt between hedge funds and a mob of retail investors, sparking a rally in some of the most-shorted stocks on Wall Street. That led to Melvin Capitallosing about 53% on GameStop Corp. and more than a dozen other bets after the firm found itself on the receiving end of a short squeeze started by retail investors motivated on Reddit.

Read more: Short Sellers Face End of an Era as Rookies Rule Wall Street

Renaissance is best known for its Medallion fund, which is only open to employees and has annualized gains of roughly 40% over the past three decades. While Medallion employs a short-term trading strategy, the Institutional Equities Fund tends to hold its stock positions for weeks or months, trades only U.S.-listed shares and is biased toward stocks its models expect to rise.

— With assistance by Hema Parmar

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