Renaissance Technologies LLC is a large hedge fund manager located in New York. It manages a little over $100 billion in client assets spread across a handful of distinct master-feeder fund structures. The firm employs a staff of over 300 employees, 160 of whom perform investment advisory functions.
Renaissance is one of the most successful hedge funds in the world, famous for its Medallion fund, which has one of the best investing records in history. The firm uses incredibly sophisticated mathematical analysis to drive performance in their funds. However, not everyone can invest in a hedge fund or have access to cutting-edge mathematical trading solutions. That's where a financial advisor can help, and SmartAsset's free matching tool can connect you with local advisors today.
Renaissance Technologies Background
Renaissance Technologies was founded in 1982 when James Simons and Howard Morgan launched the firm together. Both are considered some of the most successful hedge fund managers in the world. Simons himself is particularly decorated and is extremely involved with several philanthropic ventures. Peter Brown is the company's current CEO.
Renaissance is owned by Renaissance Technologies Holdings Corporation (78% stake) and RTC II Holdings, LLC (22% stake). Each of these parent companies is owned by firm employees or other related people. The firm is headquartered on Long Island, but its business address is located in Manhattan.
Renaissance Technologies Client Types and Minimum Account Sizes
Because Renaissance Technologies is a hedge fund manager, the firm technology only lists 14 clients – all pooled investment vehicles – on its Form ADV filed with the Securities and Exchange Commission. Minimum investments vary across the firm's funds and fund families:
- Medallion Fund Family: $25,000
- REIF Fund Family: $25,000 to $50 million
- RIDA Fund Family: $100,000 to $50 million
- RIDGE Fund Family: $5 million to $50 million
- Kaleidoscope Fund: $10,000
Services Offered by Renaissance Technologies
Unlike full-service financial advisory firms that provide investment management and financial planning services to individual clients, Renaissance Technologies is focused solely on the management of its private funds as a general partner and managing member.
The firm offers several different master-feeder fund structures:
- Medallion Funds: These funds use a short-term, quantitative trading strategy with exposure to multiple asset classes.
- Renaissance Institutional Equities Funds (RIEF): Funds that employ a net-long trading strategy with exposure to both U.S. and non-U.S. equities, as well as certain derivatives.
- Renaissance Institutional Diversified Alpha (RIDA) Funds: These pooled investment vehicles focus on equity securities that are publicly traded on global exchanges, as well as derivatives.
- Renaissance Institutional Diversified Global Equities (RIDGE) Funds: Similar to the RIDA funds, the RIDGE funds also rely on a strategy based on trading securities found on global exchanges and derivatives.
Meanwhile, the firm also manages what it calls the Kaleidoscope fund – a fund of funds for employees and investors related to employees. The Kaleidoscope Fund invests in the Medallion, RIEF and RIDA fund families.
Renaissance Technologies Investment Philosophy
The investment philosophies at Renaissance Technologies are extremely math-based, and these mathematical strategies are kept quite secretive. Many believe this has undoubtedly contributed to the firm's overwhelming success, though. The firm uses its quantitative analysis to uncover technical indicators with predictive value. It then creates computer models that help drive financial success through speculative trading. The firm's most popular and successful fund, the Medallion fund, uses both security-related and future-related instruments, and its other funds operate similarly.
When it comes to specific investments, the firm trades global equity securities that are available on U.S. exchanges. It focuses both on long-term time horizons and short-term trading mechanisms. Specific decisions depend on the fund, strategy, economic landscape and other factors.
Renaissance Technologies makes it clear to investors in its funds that investments tend to be speculative, volatile and risky. They are only designed for investors who can handle a significant degree of risk. Additionally, fund investors aren't privy to the investment decisions made in funds. They also do not participate in management decisions.
Fees Under Renaissance Technologies
Renaissance Technologies charges fees to its funds based on a percentage of each fund's assets under management. Typically, these fees are charged on an annual basis. Fees may be charged in arrears semi-annually or upon redemption.
Clients are also subject to performance-based fees. It's important to make sure you understand the specific fund's fee schedule before investing in it. Here's a look at each fund family's fee structure:
| Medallion Funds | |
| Management Fees | Performance Allocation |
| 4% of value of capital account | 36% - 44% of net profits |
| REIF Funds | |
| Management Fees | Performance Allocation |
| 0.20% - 1.50% of net asset value | 0% - 10% of net capital appreciation |
| RIDA Funds | |
| Management Fees | Performance Allocation |
| 0.85% - 1% of net asset value | 10% of net capital appreciation |
| RIDGE Funds | |
| Management Fees | Performance Allocation |
| 0.85% - 1% of net asset value | 10% of net capital appreciation |
What to Watch Out For
According to SEC rules, only accredited investors can invest in a hedge fund. More specifically, an accredited investor must have at least $200,000 of earned income ($300,000 for couples) in each of the past two years, as well as a reasonable assumption that the same will happen in the current year. You're also considered an accredited investor if you have at least a $1 million net worth (minus the value of your primary residence) either on your own or together with a spouse.
Renaissance Technologies has six disclosures listed on its Form ADV. If you care to read more about these disclosures, access the firm's Form ADV on the SEC's Investment Advisor Public Disclosure website.
Becoming a Client Of Renaissance Technologies
If you want to work with Renaissance Technologies through its hedge funds, you'll need to be an accredited investor. Even then, it can be difficult to figure out how to get involved as an investor in one of its funds. You can visit the firm's website to find its mailing and physical addresses. You can also call (212) 829-4460 if you'd like to work over the phone.
All information was accurate as of the writing of this article.
Investing Tips
- You may not meet the requirements to invest in a hedge fund, but you can still receive expert investment management by working with a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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