Introduction Hedge funds are private investment funds, viz. they are a collection of money, obtained from investors by a certain designated individual known as an investment fund manager. The idea of hedge funds consists in collecting money and then investing it as a pooled resource to earn returns. When profits come in, they are divided amongst the investors according to the percentages of their investments minus the amount they have agreed to pay to the fund manager for the services offered. Whereas hedge funds have a similarity in regard to mutual funds since they both involve the collective investments of funds pooled by the investors, the two forms of funds differ because the market regulation authorities do not require hedge funds to be registered under the federal securities laws. This requirement is both good and potentially bad because it means that investments can go through hedge funds with a lot of expedition without undue regard to the procedural technicalities required for registered funds. The negative side is that the funds suffer fewer regulations than other securities investments being a risk for investors because they could be easily swindled of their money in a Ponzi scheme (Barwick 36). The justification offered for the lack of registration is that hedge funds are private entities that investors resort to when they do not wish to have their securities declared to the public. Additionally, most hedge funds are limited to no more than 100 investors at a time. The organization of the hedge funds is in the form of limited partnerships for tax avoidance purposes. This aspect means that there will be a general partner, usually the investment manager, and limited partners, who are the investors. The manager thus administers the hedge funds. The investors, on the other hand, provide the capital, but they do not have authority in the daily running of the hedge fund. It would secure the investors’ trust if the manager contributed to the capital pool by a certain considerable percentage, as in that case, they would be sure that the manager has interests that she or he will have to protect in the investments. In regards to the remuneration of investment managers, mutual funds offer a restricted reward scheme, which means that the investment manager is only entitled to a percentage of the Assets under Management (AUM). There is no reward as far as the performance of the fund is concerned, which underscores the difference in hedge fund remuneration. In the latter, the manager is entitled to an incentive fee as well as a percentage (usually 1 per cent or 2 per cent) of the Assets under Management (Cai and Liang 66). The incentive comes when the manager performs commendably as depicted in the increase in profits as well as consistency of returns. This paper explores the hedge fund success story of Renaissance Technologies LLC. The Renaissance Technologies LLC The Renaissance Technologies LLC is an investment fund owned by Jim Simons and valued at $20 billion. The investment fund’s main vehicle of trade as per a paper that was circulated to its public are stocks and futures (Burton 25). The headquarters of the firm is situated at East Setauket,