Quant Funds Not Looking so Brilliant After All

NYT 8/20: Shrinking Quant Funds Struggle to Revive Boom

The combined assets of quantitative funds specializing in United States stocks have plunged to $467 billion, from $1.2 trillion in 2007, a 61 percent decline, according to eVestment Alliance, a research firm. That drop reflects both bad investments and withdrawals by clients.

Even quant legends like Jim Simons, the former code cracker who founded Renaissance Technologies, have seen better days.

Mr. Simons was celebrated as the King of the Quants after his in-house fund, Medallion, posted an average return of nearly 39 percent a year, after fees, from 2000 to 2007. It was an astonishing run rivaling some of the greatest feats in investing history.

But since then, investors have pulled money out of two Renaissance funds that Mr. Simons had opened during the quant boom. After losing 16 percent in 2008 and 5 percent in 2009, assets in the larger of the two funds have dropped to about $4 billion from $26 billion in 2007. (That fund is up about 6.8 percent this year, compared with a loss of about 3 percent marketwide.)

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