I'm a fund guy, and my take on RenTech is this.<p>We're lucky to even have heard of them.<p>RT started off as a CTA. If you look at CTAs a good Sharpe is something like 1-1.25. You can buy a book that will get you most of the way there, and it's really simple (Author Andreas Clenow, I forget the title). I have actually verified this myself, coding it up in Python.<p>If you simulate a random walk that has a sharpe of 1, you'll find there's plenty of periods where it's down or sideways. So you need investors. They have to pay you management fees so that you can run the thing while it doesn't make money.<p>Simons then changed tack. In the early 1990s the fund industry was very different. Most funds were discretionary funds where the boss decided what to punt on, and investors were used to trusting them to do so. So changing tack to another systematic strategy, in equities, could be sold to the investors.<p>Now this is significant, because there's a lot more stuff you can do with equities. There's industry structure, there's individual company information, there's analyst predictions for each firm, each firm has its own price series, there's corporate actions, and so on for thousands of stocks. Contrast that with CTAs where you have a couple dozen liquid things, maybe 40, in a few categories (bonds, equities, commodities, FX).<p>If you find a strategy that works for a commodity and it gives you some Sharpe, maybe 0.1, and we assume for simplicity they are uncorrelated (which they aren't!), you can roughly sum them up to sqrt(n). So there's a big difference between 40 and say 2000. This is just a vignette, don't take it literally. But the point is you can find strategies that in aggregate are much better in the equities space. Purely my opinion, I don't often talk to people about this, so no feedback other that my collaborators.<p>So back to the story, Simons builds this thing and it starts printing money. Now he's insanely rich, and the thing never loses money. So what does he need investors for? They are getting a free ride until the fund hits capacity.<p>Now if he had just gone straight to the Medallion fund, the thinking is the same. Why on earth would he need investors? If he didn't need investors, why would he have his name out there? He wouldn't, and neither would anyone who'd discovered anything similar. There's probably a few groups like that out there. They're unlikely to have built out the capacity, because they never became hedge funds. But I'm thinking they're out there.