Robert Mercer, co-CEO of quantitative hedge fund Renaissance Technologies, has been in the public eye this year because of his backing of Donald Trump. His political activities sparked a feud with an ex-employee who claims he was fired for criticizing the views of his boss. But none of this appears to have distracted or impacted Mercer’s business. Renaissance Technologies, which was founded by its billionaire chairman James Simons in 1982, has seen its assets under management swell amid strong performance and investor inflows. Robert Mercer, co-CEO, Renaissance Technologies Renaissance Technologies now oversees $45 billion, a stunning jump from $27 billion at the start of 2016. Renaissance, which was a $36 billion hedge fund firm before it hit some problems in 2007, is now bigger than ever and tied as the nation’s second biggest hedge fund firm. Renaissance’s funds that still include outside investor capital keep posting solid returns. Renaissance Institutional Equities fund, the firm’s biggest hedge fund, is up 6% net of fees in 2017 after surging by 21.5% in 2016. Renaissance Institutional Diversified Alpha, another large fund, has returned 7.5% in 2017 after posting gains of 10.7% last year. The smaller Renaissance Institutional Diversified Global Equities fund is up 8% in 2017. Renaissance’s recent success comes at a time when much of the hedge fund industry is struggling, posting disappointing returns for years and desperately trying to convince investors to stick with their funds, sometimes without success. But investors appear more enthusiastic than ever about hedge funds like Renaissance that use computers, math and big data to generate returns. They seem moved by the explosion of information applicable to stock and securities prices and increasingly believe technology and database approaches are required to successfully trade financial markets. Two Sigma Investments is another quantitative hedge fund with explosive growth that doesn’t seem to ever slow down. Founded by billionaires John Overdeck and David Siegel in 2001, the firm’s assets under management also just reached $45 billion, up from $32 billion at the start of 2016. That puts it alongside Renaissance as the nation’s second-biggest hedge fund firm. Incredibly, Two Sigma was managing just $5 billion in 2010. Headquartered in Manhattan’s SoHo neighborhood, Two Sigma now has 1,200 employees, two-thirds of whom are focused on research and development. In recent months, its asset growth has mostly not come from its flagship hedge funds. Instead, assets have flowed into a new UCITS fund Two Sigma opened with Schroders in Europe and from hopping on the factor-based investing train. Institutional investors are increasingly interested in allocating to factor strategies, rules-based portfolios tilted to securities with certain attributes, like momentum or quality, believed to produce superior returns over time. Two Sigma got into the factor-investing business in 2015 and has found demand to be strong. The fees it charges on these products are significantly lower than its traditional hedge funds. It competes in this area with firms like billionaire Cliff Asness’ AQR Capital Management and BlackRock, the nation’s biggest asset manager. Two Sigma’s big Compass hedge fund is down 1.8% so far in 2017 after gaining 10.3% in 2016. It’s flagship Spectrum fund returned about 3% last year. In addition to the expanding hedge fund business, Overdeck and Siegel are growing Two Sigma’s market-making arm. Two Sigma Securities announced this week that it had purchased the global options market-making business of Interactive Brokers. The firm already handles some 5% of the shares traded in U.S. markets daily. Overdeck and Siegel have clearly built a new Wall Street powerhouse.
Technology funds Renaissance Technologies and Two Sigma Capital have both posted large gains in assets under management as investors flock to their data - driven factor and quant - based products . They 're bucking the trend in the hedge fund industry , which is suffering from poor returns and a drift towards passive investment vehicles . Both companies have seen their assets under management rise to $ 300 , with Renaissance overseeing $ 27bn at the start of 2010 and Two Sigma looking after $ 100 at the same point .