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Despite the current stock market turmoil and deep economic recession, Renaissance Technology and its founder, Jim Simons, an established legendary hedge fund, are still on track for record returns in 2020.

Although Renaissance management fees were high-including 36 per cent or more of all transaction gains and 5 per cent of assets under management-it still brought considerable returns to investors.

According to reports, the flagship fund of the Renaissance--QuantificationHedge Fund Grand Medal Fund (Medallion）It made a net profit of 24% from the beginning of this year to April 14.It is reported thatAfter deducting the management fee, the income is 39%.Much of the fund's impressive performance so far is due to a 9.9 per cent increase in March.

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The $10 billion Grand Medal Fund is open only to employees, former employees and a small number of people close to the company, so management expenses eventually flow back to many employees as the company's profits.

It is estimated thatSince 1988, the average annual return of the Grand Medal Fund after deducting fees is 39%, and the annualized rate of return before deducting fees is more than 66%. It is a real money-making machine and a veritable "combat base" in hedge funds.Its best years include 2000 and 2008, two nightmares for most investors.

Other Renaissance funds did not perform so well, which made Wall Street interested in the operating strategy of the Grand Medal Fund. The Wall Street Journal saidInstead of predicting the direction of individual stocks or the market, the Grand Medal Fund bet most of its profits on the relationship between stocks. This strategy can be seen as a more complex version of the so-called statistical arbitrage investment.Many Wall Street investors are also trying.

The Grand Medal Fund holds thousands of stocks, shorts thousands of other stocks and trades foreign exchange, commodities and bond futures, according to people familiar with the matter.

In fact, during a market crash, most investments tend to plummet at the same time, which may also make it difficult for the Grand Medal Fund to make a profit.So the Grand Medal Fund had a negative return in March, and then the fund's quantitative trading program found the opportunity for mispricing in the market and finally achieved a positive return.

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Simmons, founder of the Renaissance, is called a legendary investor.He is not a financial or investment background, but a world-class mathematicianIt is known as "the most profitable mathematician on Wall Street", "the most profitable fund manager in the world", "the father of quantitative trading" and so on.

The Renaissance currently manages about $75 billion. Simmons is worth $23 billion and will turn 83 this month. Although Simmons is still chairman of the Renaissance, he focuses on philanthropy. He handed over the company to CEO Peter Brown. Brown, a computer scientist, once said he slept no more than four hours a day.

Because of the founder, the company's investment style is also unique.The Renaissance's prediction model was jointly developed by 320 cross-industry experts.String theorists, astronomers and other scientists and mathematicians, for example, are based on more than 10 million lines of computer code. The model generates all transactions based on historical prices and other reference data, which completely eliminates human subjective emotions in investment decisions.

In fact, because the Renaissance trading system uses complex machine learning, it is difficult for even internal managers to immediately understand why the company's performance is good or bad. Some of them thinkTheir gains, at least in part, may come from mistakes made by rival investors when the market is facing challenges.

A person close to the company said:

The computer runs automatically, we almost never intervene, and the computer tells us what to do. Every experience we have shows that human operations tend to be worse than machines.

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Grand Medal funds generally implement the "intermediate frequency" trading strategy, which can be held for a short period of time or as long as several months, rather than in seconds as in the case of high-frequency trading strategies. However, the Grand Medal Fund will also benefit from volatile markets.

It is worth mentioning that according to the prediction model of the Renaissance, we have reason to believe thatInvestors should be prepared for continued market volatility.

End of MarchThe Grand Medal Fund opens a window to raise money for its users in order to expand the size of the fund. This is highly likely because quantitative trading models predict more profit opportunities in the coming months-that is, more unstable and challenging markets.