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Computer-driven hedge fund Renaissance Technologies was wrongfooted after Donald Trump’s “liberation day” tariff announcement last week sent shockwaves across global financial markets.
The Renaissance Institutional Equities Fund, one of the group’s flagship strategies offered to external investors, was down about 8 per cent for April as of Friday last week, according to three people familiar with the figures. The losses reduce the fund’s 2025 gains to 4.4 per cent.
Renaissance’s losses underscore the tumult in financial markets since Trump last Wednesday said the US would impose universal 10 per cent levies and far higher duties for many of America’s leading trading partners.
One of Renaissance’s smaller strategies fared better in the recent market turbulence. The Renaissance Institutional Diversified Alpha Fund, which as of last September managed just $3.6bn, was down 2.4 per cent in April and has returned 11.5 per cent for the year, the people said.
The institutional equities fund, which managed $19.6bn as of September last year, gained 22.7 per cent last year, while the Diversified Alpha fund rose 15.6, according to a person who had seen the numbers.
Founded by quant pioneer Jim Simons, who was known as the “quant king” and died last May, Renaissance is one of the world’s best-known quantitative hedge funds. Quant funds shun human decision making and instead rely on computer algorithms to make trades, often identifying patterns in market data and trying to surf trends.
Hedge funds and other investors faced some of the most challenging trading days last week since the 2020 coronavirus pandemic shook global markets.
Stocks around the world fell sharply on Thursday and Friday, with the US S&P 500 dropping more than 10 per cent. This week, even ultra-safe assets such as US government debt sold off, as hedge funds moved their money into cash and pared back their exposure to the market.
Hedge funds have also been hit with the steepest margin calls since the pandemic, as Wall Street banks last week asked their clients to provide more money as backing for their loans, the Financial Times reported. That leverage allows hedge funds to amplify profits when they make lucrative trades, but it can also magnify losses.
After decades of high returns, Renaissance’s external funds recorded big losses from the volatile swings during the pandemic, which led to its external assets under management falling steeply. The firm’s Medallion fund, often called the greatest moneymaking machine in history, has been fully closed to external investors for about two decades.
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