Hedge Fund Portfolio Tracking: Renaissance Technologies (Jim Simons), Q3 2008

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by: Market Folly

This is the Third Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F filings here.

The other funds we've already covered include:


Next up is Jim Simons' Renaissance Technologies, ranked fourth in Alpha's 2008 hedge fund rankings. Rentec, as it is commonly known, was started by Simons in 1982 and as of its latest 13F filing, holds $37 billion in public equities. It employs mathematical and statistical methods to execute its investments and trades, and its flagship $8 billion Medallion fund has averaged annual returns around 35%. Unlike most hedge funds which charge a flat 2% management fee on assets and then a 20% performance fee, Medallion charges a 5% management fee and a performance fee > 40%. The fees are high, but after seeing its returns, one could argue it is easily worth it.

When last we checked, Medallion was up around 58% for the year as of October. The bad news to anyone reading is that the fund is pretty much limited to only former and current Renaissance employees. Simons other funds, which are open to other investors, the Institutional Futures and Institutional Equities funds were -15.6% and -14.8% year-to-date respectively as of October.

Rentec is noted to be the most successful hedge fund in the industry, with returns eclipsing other legendary investors including Paul Tudor Jones, Bruce Kovner, and George Soros. Recently, Mr. Simons recently testified before Congress with numerous other hedge fund managers and discouraged the SEC from making funds' short positions available to the public. For more on Simons & Renaissance, check out our post on hedge fund manager interviews. Do note that tracking Rentec through 13F filings is only slightly useful, at best, because, it trades everything... literally.

We're covering it in our portfolio tracking series because it has an outstanding track record and people are always interested in what it is up to. Just note that it is very different from the majority of funds we cover and since it trades every type of asset under the moon, the 13F is only slightly relevant. The majority of equity holdings you will see in its portfolio are from its Institutional Equities Fund.

The following were its long equity, note, and options holdings as of September 30, 2008 as filed with the SEC. All holdings are common stock unless otherwise denoted.

Some New Positions (Brand new positions that it initiated in the last quarter):

  • Emerson Electric (NYSE:EMR)
  • Air Products (NYSE:APD)
  • US Steel (NYSE:X)
  • Visa (NYSE:V)
  • Celgene (NASDAQ:CELG)
  • Praxair (NYSE:PX)
  • Bunge (NYSE:BG)
  • CVS Caremark (NYSE:CVS)
  • Tyco (NYSE:TYC)
  • Deere (NYSE:DE)
  • National Oilwell Varco (NYSE:NOV)
  • Alcoa (NYSE:AA)
  • Baker Hughes (NYSE:BHI)
  • Ralcorp (RAH)
  • Questar (NYSE:STR)
  • Weatherford (NYSE:WFT)
  • Chesapeake Energy (NYSE:CHK)
  • Vodafone (NASDAQ:VOD)
  • Williams Companies (NYSE:WMB)
  • Cardinal Health (NYSE:CAH)
  • Banco Itau (ITU)
  • BJ Services (BJS)
  • FMC (NYSE:FMC)
  • Hologic (NASDAQ:HOLX)
  • PNC Financial (NYSE:PNC)
  • HCP (NYSE:HCP)
  • Anheuser Busch (NYSE:BUD)
  • Centex (CTX)
  • Sara Lee (SLE)
  • ABB (NYSE:ABB)

Some Increased Positions (A few positions it already owned but added shares to):

  • Costco (NASDAQ:COST): Increased position by 2,030%
  • Apple (NASDAQ:AAPL): Increased position by 1,650%
  • Freeport McMoran (NYSE:FCX): Increased position by 1,029%
  • Wrigley (WWY): Increased position by 496%
  • General Dynamics (NYSE:GD): Increased position by 258%
  • Amgen (NASDAQ:AMGN): Increased position by 192%
  • DirecTV (DTV): Increased position by 90%
  • Gilead Sciences (NASDAQ:GILD): Increased position by 65%
  • Honeywell (NYSE:HON): Increased position by 44%
  • Eli Lilly (NYSE:LLY): Increased position by 32%
  • Apollo Group (NASDAQ:APOL): Increased position by 22.5%

Some Reduced Positions (Some positions it sold some shares of - note not all sales listed):

  • Berkshire Hathaway Class A (NYSE:BRK.A): Reduced position by 50%
  • Colgate Palmolive (NYSE:CL): Reduced position by 30%
  • AstraZeneca (NYSE:AZN): Reduced position by 29%
  • Paychex (NASDAQ:PAYX): Reduced position by 15%
  • Nationwide Financial Services (NFS): Reduced position by 14.5%
  • Philippine Long Distance (NYSE:PHI): Reduced position by 14%
  • Walmart (NYSE:WMT): Reduced position by 11%
  • GlaxoSmithKline (NYSE:GSK): Reduced position by 10%

Removed Positions (Positions it sold out of completely):

  • Beckman Coulter (NYSE:BEC)
  • Republic Services (NYSE:RSG)
  • L3 Comm (NYSE:LLL)
  • Occidental Petroleum (NYSE:OXY)
  • Burlington Northern (BNI)
  • China Mobile (NYSE:CHL)
  • CH Robinson (NASDAQ:CHRW)
  • Fiserv (NASDAQ:FISV)
  • Whiting Petroleum (NYSE:WLL)
  • JPMorgan Chase (NYSE:JPM)
  • Centurytel (NYSE:CTL)
  • Grey Wolf (GW)
  • Joy Global (JOYG)
  • Omnicom (NYSE:OMC)
  • Aeropostale (NYSE:ARO)
  • Canadian Natural Resources (NYSE:CNQ)
  • Reinsurance Group (NYSE:RGA)
  • Best Buy (NYSE:BBY)
  • Procter & Gamble (NYSE:PG)
  • Petroleo Brasileiro (PBRA)
  • American Express (NYSE:AXP)
  • Kellogg (NYSE:K)
  • Navteq - inactive
  • Wells Fargo (NYSE:WFC)
  • 3M (NYSE:MMM)
  • United Technologies (NYSE:UTX)
  • Agrium (NYSE:AGU)
  • General Electric (NYSE:GE)
  • Linear Technology (NASDAQ:LLTC)

Top 20 Holdings (by % of portfolio)

  1. UST (NYSEARCA:UST): 1.17% of portfolio
  2. Walmart (WMT): 0.88% of portfolio
  3. Amgen (AMGN): 0.86% of portfolio
  4. Apple (AAPL): 0.78% of portfolio
  5. Wrigley (WWY): 0.7% of portfolio
  6. Forest Labs (NYSE:FRX): 0.58% of portfolio
  7. Colgate Palmolive (CL): 0.54% of portfolio
  8. Philippine Long Distance (PHI): 0.52% of portfolio
  9. GlaxoSmithKline (GSK): 0.51% of portfolio
  10. Lockheed Martin (NYSE:LMT): 0.5% of portfolio
  11. DirecTV (DTV): 0.49% of portfolio
  12. General Dynamics (GD): 0.48% of portfolio
  13. Emerson Electric (EMR): 0.45% of portfolio
  14. Air Products (APD): 0.45% of portfolio
  15. Chunghwa Telecom (NYSE:CHT): 0.45% of portfolio
  16. Novo-Nordisk (NYSE:NVO): 0.44% of portfolio
  17. Paychex (PAYX): 0.42% of portfolio
  18. Dun & Bradstreet (NYSE:DNB): 0.41% of portfolio
  19. Humana (NYSE:HUM): 0.41% of portfolio
  20. Freeport McMoran (FCX): 0.39% of portfolio

Assets from the collective long U.S. equity, options, and note holdings were $43.9 billion last quarter and were $37.1 billion this quarter.

Please note that we have not detailed changes to every single position in this update, but we have covered all the major moves. Also, keep in mind that these filings only include long equity, notes, and options holdings. They do not reflect its cash, short portions, or holdings in other markets (currency, commodities, debt, foreign markets, private equity, etc.).

Overall, it's been one of the worst years ever for hedge funds, as we noted in our new November hedge fund performance number update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.