Jim Simons’ Renaissance Technologies is starting a new hedge fund, reports Bloomberg. It is the firm’s first new fund in five years and will trade stocks and futures according to a document sent on the subject to potential investors.
The new fund, the Renaissance Institutional Diversified Alpha Fund, is Renaissance Technologies’ fourth fund. The firm already runs the Renaissance Institutional Equities Fund, which has $7 billion in assets under management, and the Renaissance Institutional Futures Fund, which has $4 billion in assets under management. Renaissance Technologies also has a third fund that is only open to its employees. “The equities and futures funds, which produced mediocre returns in 2008 and 2009, rebounded in the last two years,” writes Bloomberg. “The equities fund, known as RIEF, jumped 35 percent last year, and the futures fund climbed 3 percent, according to a person briefed on the returns who asked not to be identified because the information is private.” The new fund is expected to be more volatile than the RIEF.
According to Bloomberg, “The decision to start a new fund comes a little more than a year after Peter Brown and Robert Mercer, co-chief executive officers and former International Business Machines Corp. language-recognition specialists, took over from Simons, 73, who retired in 2010.” The new fund will have a different fee structure than the firm’s other funds. It “will charge investors a 1 percent management fee and a 10 percent performance fee for the new fund, about half the average rate for a hedge fund.”