ETF and options hedge fund Renaissance Institutional Futures, launched in October 2007 by Renaissance Technologies' James Simons, is to forgo all its management fees for 2009, according to the Wall Street Journal.

Mr Simons has told investors that he is waiving his 1 per cent fixed management fee this year following a “less than stellar” performance in 2008.

This reduction is worth about $30 million – and the discount applies even if the fund delivers good results in 2009. In addition, the fund must recoup losses before investors need to pay performance fees or share the fund's profits with its managers. A spokesman for Mr Simons declined to comment.

The fund fell 12 per cent in 2008, according to a 31 December letter to clients seen by the WSJ, which compares well with the 38 per cent loss for the S&P 500 index in 2008 and to the more than 20 per cent average falls in hedge funds around the world, according to Chicago-based Hedge Fund Research.

Hedge funds typically charge a 2 per cent annnual management fee and a 20 per cent fee on performance over a specific watermark. Such fees are typically higher than for long-only actively managed funds and passive funds.