In what timescale though? There are huge differences between the timescales of "realtime" (say HFT), a second later, a minute later, an hour later, a week later and so on. Do they operate at all of them?
I have no specialist knowledge, btw, I'd sincerely like to know!
If you're interested in this, you'll likely enjoy Gregory's interview on Masters in Business (a Bloomberg podcast) from last Wednesday. Also, Gregory's book will be out in a few days.
If memory serves, in the aforementioned podcast Gregory mentions that the RenTech generally holds most things for a few days (sometimes a few hours). However, they don't engage in HFT or HFT-like trading. This was surprising to me as I assumed it was all reasonably short holdings (relatively speaking), although I knew they weren't a pure HFT firm.
I also seem to recall Gregory mentioning there's some kind of running joke internally that their trading systems aren't nearly as good as they should be (or like what you would find at HFT firms). Given the intellectual and monetary heft within RenTech perhaps that's a bit of false modesty on their part.
I'll be interested in reading Gregory's book as he does seem to have put together a lot of novel information on RenTech. However, he does seem to suggest that very little of the day-to-day workings of the firm will be explored, which would obviously be immensely interesting.
EDIT: RenTech has several funds, it should be noted. Some of which still take outside capital. What I've said above may have only been applicable to the Medallion fund.
From what I recall, their approach is mostly what you might call "special situations." That is, their analysis looks for significantly incorrectly priced items, and purchases/shorts them.
The Medallion Fund is kept fairly small so it can capture these items without changing their prices substantially. That is, the fund owners have to take their 40% return each year out of the fund.
>That is, the fund owners have to take their 40% return each year out of the fund.
The Medallion is for the employees money. That reminds about salary payment schema in Russian banks in 199x (don't know for today) - employees got to open very special, employees only, accounts paying extremely high, many times beyond the market, interest. The bank account interest got beneficial taxation for the employees, and the bank didn't have to pay various taxes, like social security, etc., which an employer would normally pay on salary. Of course how much an employee could put into such an account had a limit specific for a given employee, and thus the employee did have to regularly take the money out of the account.
I have no specialist knowledge, btw, I'd sincerely like to know!