Courtesy of Pam Martens
“…no adequate rational market explanation for this performance.”
If something sounds too good to be true, you can bet your discolored Bernie Madoff account statements that it will inevitably end badly.
Quietly, at the start of a three-day weekend, Bloomberg News published this titillating news item about the hedge fund Renaissance Technologies, known as RenTech or RenTec on Wall Street:
“Credit Suisse Group is temporarily barring clients from withdrawing all their cash from a fund that invests with Renaissance Technologies…The fund lost about 32% last year, in line with the decline in the Renaissance Institutional Diversified Alpha Fund International fund that it invests into, the people said. Renaissance, regarded as one of the most successful quant investing firms in the world, was rocked by billions of dollars in redemptions earlier this year after unprecedented losses in 2020.”
Put the above paragraph together with the paragraph below from a Bloomberg report on February 8 and you can see why tongues are wagging across Wall Street:
“RIEF [ Renaissance Institutional Equities Fund], lost 19% in 2020, the letters show. That fund got the biggest chunk of the redemptions. The Institutional Diversified Alpha fund dropped 32% and the Institutional Diversified Global Equities fund fell 31%. Medallion gained 76%, according to Institutional Investor.”
Here’s the thing: the Renaissance Medallion fund is only available to current and former partners and employees of Renaissance Technologies. To put it another way, insiders are getting super rich while outside investors lose their shirts.
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