Renaissance Technologies halved its Tesla stake and exited its GameStop and AMC wagers last quarter.
Jim Simons’ quant fund supercharged its bet on Warren Buffett’s Berkshire Hathaway to $605 million.
RenTech doubled its Tesla holdings and grew its GameStop wager by 118-fold in the first quarter.
RenTech, which ranks among the largest and most successful hedge funds in history, was founded by Jim Simons, a former NSA codebreaker and MIT math professor. The quantitative fund employs algorithms to decide many of its trades, resulting in sweeping changes to its stock portfolio each quarter.
Simons’ fund slashed its Tesla holdings by 52%, from 1.6 million shares to 748,000. The value of the position tumbled from $1.7 billion to $504 million, in part because Tesla’s stock price plunged by 38% in the period. Elon Musk’s electric-vehicle company dropped from RenTech’s number-two holding to 16th on the list in just three months.
RenTech also eliminated its GameStop stake, despite boosting its bet on the video-game retailer by 118-fold in the first quarter. Moreover, the quant fund exited AMC, after cutting its wager on the cinema chain by 61% in the three months to March 31. It counted both meme stocks in the top 10% of its roughly 4,000 holdings at the end of the first quarter.
Notably, Simons’ fund grew its stake in Berkshire from $70 million to $605 million in the past quarter, even as the conglomerate’s stock price plunged by 22% in the period. Buffett’s company ranked among its top 20 holdings at the end of June; it was outside of the largest 250 positions three months earlier.
Focusing on RenTech’s top 20 positions going into the quarter, the fund disposed of roughly $600 million stakes in Amazon and Alphabet, and slashed its bets on Moderna, Advanced Micro Devices, and Monster Beverage. On the other hand, it bolstered its wagers on Apple and Meta Platforms, and added to its Hershey and Airbnb holdings.
The overall value of RenTech’s US stock portfolio dipped by less than 1% to $84.5 billion in the second quarter, even as the S&P 500 and Nasdaq indexes slumped 16% and 22% respectively. Simons’ fund may have offset some of the market decline by expanding its total holdings by about 140 stocks in the period.
Quarterly portfolio updates only provide a snapshot of a firm’s holdings on a specific date, and exclude some investments such as short positions and stakes in private businesses and overseas-listed companies. That means they don’t always paint a full picture of a fund’s investing strategy.
They’re probably even less revealing when opaque algorithms are dictating trades. Still, it appears that RenTech soured on Tesla last quarter, gave up on two of the best-known meme stocks on the market, and backed Buffett to capitalize on the current market downturn.
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