At a time when hedge funds are getting clobbered by the economic downturn and investor redemptions, one fund in the heart of the financial universe is quietly expanding.
Renaissance Technologies, a quantitative hedge fund shop based in Long Island, is subletting 6,700 square feet at 800 Third Avenue, according to Crain’s New York Business. The firm occupies about 40,000 square feet in Manhattan.
Renaissance or RenTech as it’s referred to, is one of the largest hedge fund managers in the world, with about $35.4 billion in assets under management as of October, 2007, according to bloggingstock.com.
The firm’s founder, James Simons, once taught in Harvard’s math department and has reportedly staffed RenTech with PhD mathematicians and scientists. His firm charges a 5% management fee and 36% of profits compared to the 2% and 20% model which is the industry norm. But his funds earned 43.6% annualized returns, net of fees, between 1996 and 2007, enough for him to pocked $1.7 billion in compensation.
You may recall that Simons was one of four top hedge fund managers, along with George Soros, Philip Falcone of Harbinger Capital, and Kenneth Griffin of Citadel Investment Group, who testified in front of a Congressional committee recently on the supposed dangers that hedge funds pose to financial markets.