Page 28 - GoldenOne

GoldenOne
Fund managers at institutional investors were convinced, and it became fashionable to place large amounts of money in Renaissance, which did nothing but lose money with these funds, or make a very small profit at best. The fund for these private sources was separate from the Renaissance fund, and so the institutional investors took all of the losses, and Renaissance received a larger-than-normal 5% annual fee for badly managing this institutional-investor money in Renaissance Institutional Equities Fund (RIEF), which soon amounted to fifty billion dollars. So, Renaissance made 2.5 billion dollars annually for mismanaging pension funds of hard-working Americans. And the amount of the fund kept increasing, as did the fees of RIEF.
Renaissance was founded in 1982 and is known for its secrecy. The company has long held that any cash infusions could have a negative effect on returns.
The secrecy is to protect it from any revelation of what it really is: a Ponzi-Madoff scheme. And the cash infusions could dilute the profits–not the profits of trading–the profits from tax dodging. Renaissance would show an increase in its value. But that increase was not the result of trading, but rather of tax dodging. And eventually, the chickens could come home to roost.
From the beginning, Mercer and Simons decided that no one would know the actual earnings of Renaissance. A subsidiary of Renaissance called Medallion would do all of the trading, so they would show all of the phenomenal earnings promised by Renaissance.
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