Credit Suisse Group is temporarily barring clients from withdrawing all their cash from a fund that invests with Renaissance Technologies after the strategy tanked and investors rushed to exit.
The bank has invoked a so-called hold back clause, after assets in the CS Renaissance Alternative Access Fund slumped to about $250 million this month from about $700 million at the start of 2020, according to people with knowledge of the matter. Though investors will receive 95% of their redemption requests after two months, the remaining 5% is expected to be paid out in January, after the fund's year-end audit, the people said.
The fund lost about 32% last year, in line with the decline in the Renaissance Institutional Diversified Alpha Fund International fund that it invests into, the people said. Renaissance, regarded as one of the most successful quant investing firms in the world, was rocked by billion of dollars in redemptions earlier this year after unprecedented losses in 2020. Three of its funds open to external investors fell by double digits last year.
Credit Suisse and Renaissance declined to comment.
Credit Suisse is currently under broader scrutiny as new chairman Antonio Horta-Osorio reviews the risk and control functions after the implosion of the bank's supply-chain finance funds linked to Greensill Capital and the collapse of family office Archegos Capital Management.
The Credit Suisse feeder fund was sold as an investment option for rich clients at the bank's wealth arm.
The Renaissance fund, which allows investors to take out money every month, also has the ability to hold back but is not invoking the clause and hasn't ever done so, according to a person with knowledge of the matter.
The fund was up 9.4% this year through May 21 after last year's losses, the person said. Hold back clauses are a standard part of offer documents at some U.S. based hedge funds.