Renaissance says quant models misfired during March mayhem

For Jim Simons, history is repeating itself, at least when it comes to meltdowns in the quant fund world.

Hedge fund manager Jim Simons talks during an interview Monday, April 16, 2007 in New York. (AP Photo/Mark Lennihan) | Photo: Mark Lennihan/AP/Ritzau Scanpix/AP

Computer models at Renaissance Technologies, the firm founded by the mathematician and former codebreaker Jim Simons, misfired when volatility surged this year, contributing to a first-quarter loss at its largest hedge fund. The beta models, which help determine portfolio exposure at funds for outside investors, “in recent volatile markets have not performed as expected,” Renaissance said in a March 30 filing.

The setback for one of the industry’s best known hedge funds is another example of the turmoil wrought by the coronavirus. The pandemic has stalled global commerce, ended a record bull run for stocks and forced the Federal Reserve into an unprecedented multitrillion-dollar rescue of financial markets.

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