So, I'm sure you might be familiar with Warren Buffett, Ray Dalio, Steve Cohen, or maybe even Bill Ackman. These people are some of the greatest money makers and financial minds of all time and are always at the forefront of the asset management/investment industry.
The only thing is unless you're pretty immersed in finance, I can bet you probably haven't heard of Renaissance Technologies. Renaissance Technologies, or 'Ren Tech' is one of the most successful, if not the most successful Hedge Fund of all time. Ren Tech was founded in 1982 by Jim Simons and Ren Techs's premier fund, 'The Medallion Fund' has generated an average annual return of 66% (before fees) from 1988 - 2018. Just for context, in 2019, if you would have invested in the S&P 500, you would have generated about a 30% return - which would've been very solid. The thing is, Ren Tech averages a return that is more than double that number and has done that consistently since 1988. Now, you may be wondering, "How the hell does Ren Tech generate such massive returns so consistently?" Well, Ren Tech takes a bit of a unique approach to the markets through the use of mathematics, quantitative analysis, and statistics. In fact, the founder of Ren Tech, Jim Simons wasn't some finance guru who decided to go launch his own fund, he was a Mathematician who worked in the field of geometry and even worked for the NSA as a code breaker.
On top of that, Renaissance doesn't even hire people with financial backgrounds, they almost exclusively hire mathematicians, physicists, and even computer programmers. Ren Tech's extensive success can undoubtedly be attributed to their unique approach to markets or their ability to recruit some of the smartest people in the world; however, another major contributor to their long term success has been their secretiveness. Renaissance doesn't really talk to the public much, and neither does their billionaire founder Jim Simons, adding to the overall mysteriousness of Ren Tech and further monopolizing the specific strategies and research that they apply to investing.
So now that you know about Ren Tech, and you know about their founder, you also know about their incredible success, I'm sure you might be thinking, "Can they make money for me?" Unfortunately, the Medallion Fund isn't open to new investors; in fact, the fund is currently only open to employees of the company. The Medallion Fund, at one point, was actually open to outside investors, but eventually, they gave everyone their money back and closed off access to only insiders.
Without a doubt, Renaissance Technologies is one of the coolest yet most mysterious financial companies there is. We don't know much about them other than the fact that they absolutely dominate pretty much everyone else in the industry and do it on a freakishly consistent basis.
While we may always have a broad understanding of the quantitative approach Ren Tech applies to markets, we will never fully understand the scope of how they truly perform so well. Maybe one day down the road, they'll open their doors up, but until then, all of us outsiders will be left in the ever lingering mystery of one of the best moneymakers of all time.
That’s all I have for today, I’ll see you guys next time.