RenTech’s Medallion Fund Smokes Its Peers

Peter Thiel might be a smart guy, but he has figured not yet figured out how to get away with charging 5/44. Thiel's Clarium Capital is running neck and neck with Simon's Medallion Fund year-to-date, with both funds up in the mid 40% range through the end of July....

Simons' $8 billion Medallion fund, the oldest of the three Renaissance Technologies funds, was up 48 percent at the end of July, net of fees, according to people familiar with the funds' returns.

Medallion, which is funded mostly by Renaissance insiders, charges a whopping 49 percent in fees, including a 5 percent management fee and 44 percent incentive fee.That's high even by the standards of an already costly industry - the industry average is a 2 percent management fee and a 20 percent incentive fee - but with such eye-popping returns, no one's likely to complain.

Last year, Medallion earned upward of 85 percent. And despite tumultuous markets last month, which slammed some of the year's best performing funds, Medallion was up nearly 7 percent in July, The Post has learned. New York Post

Thiel and Clarium are within spitting distance, and these two funds have among the best numbers among strategies managing more than $3 billion. But their is a lot of pain in Hedgistan, no matter what the strategy or the manager's pedigree:

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Medallion is smoking as usual...RIEF not so much....

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A surge in financial-services stocks and slumping energy markets hit some hedge funds hard in July, leaving the $2 trillion industry on course for its worst year in at least two decades.

David Einhorn, a hedge fund manager whose been betting against Lehman Brothers, lost money, as did funds run by GLG Partners. Commodities funds run by Fortress Investment Group also lost some ground.

Hedge funds tracked by Hennessee Group LLC fell 1.95% on average in July, almost twice as bad as the Standard & Poor’s 500 index, which declined 1%.

Alas, the Three Amigo’s are struggling, despite the props the received over their high profile short positions. Still, not all is good for Simons. While I have not seen the numbers for his Institutional Equities Fund, assets are down to $15 billion from $28 billion at the peak. And with Medallion closed to new investors, and RenTech’s marketing efforts beginning to fall on deaf ears with the consultants and fund of funds, Simons and the rockets scientists on Long Island might have to make themselves content with the haul Medallion is bringing in.

They will continue to fiddle with REIF’s algorithms, but if RenTech does not get the ship turned around the growing discontent in the distribution/marketing channel could manifest itself in additonal redemptions despite Simons appareny prowess.
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MEDALLION FUND HITS A JACKPOT
New York Post

Managers under-perform the market in July
Marketwatch
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