One of these men has a gun and the other can bench 350. Consider not giving them shit about the returns.
Now that Jim Simons has officially retired (he announced his intent to do so last October but he’s been saying that since 2002 and every time he got his foot out the door they pulled him back in, like the siren song of a carton of Pall Malls), it’s time to introduce the world to the new team. Bob Mercer and Peter Brown (pictured) are running the good ship Renaissance now.
The duo, who have known each other since they met doing “code-breaking research for the Defense Department,” and came over to RenTec together in 1993, claim that in Jimbo’s day to day absence (he’s still chairman of the place but will be devoting more time to charity and his 219-foot yacht, Archimedes) they won’t be changing much out in East Setauket, though that’s not entirely true. Yes, the computer servers that run the trading operations will retain their nicknames– Laddersnake, Howler3 and Neon– and yes, the whole operation is still just a front for Long Island’s first tobacco farm. But Brown and Mercer are seriously considering getting rid of RIFF (Renaissance Institutional Futures Fund) and RIEF (Renaissance Institutional Equities Fund), on account of their knack for making a lot less money than Medallion.
Like, a lot less (the flagship has seen average returns of about 45% a year, after fees, since its inception in 1988 and has only lost money in one quarter since 1995, when it was down 0.5% in Q1 of 1999. RIFF and RIEF have fared significantly worse, and assets, which in 2007 were a combined $30 billion have dropped to $6 billion due to withdrawals). The fact that whereas Medallion is almost entirely employee money, and the shittier two funds (RIEF lost 6% last year and 16% in 2008) are open to outside investors has caused a bit of stress for new management. “Other people’s money is like a lever on your anxiety,” says Mr. Brown. So, yes, they’re probably going to put R ‘n R out to pasture but nothing’s for sure just yet. While we wait and see, we might as well get to know Brown and Mercer a bit better. Scott Patterson and Jenny Strasburg recently hopped on the LIRR and spent some time with the two. Here’s what they found out.
Bob is 63 and politically conservative. He got his Ph.D in computer science from the University of Illinois. He whistles during meetings and like other plays with model trains in his basement. He doesn’t talk to employees unless he absolutely has to, and he’s got a bag of SHHH with your name on it (“I’m happy going through my life without saying anything to anybody,” he says.) Zip the lip, or risk getting shot in the face (Bob is a card carrying member of the NRA).
Pete is 55 and has a Ph.D in computer science from Carnegie Mellon. When he first joined Team RenTec, he rode a unicycle around the workplace to save time. He’s politically liberal, loves to chat and is very competitive. Make sure to bring your Champion sweatshirt with the sleeves cut off because Pedro is known to challenge people to “feats of strength” in the office gym.
Pioneering Fund Stages Second Act [WSJ]