Niket Nishant and Svea Herbst-Bayliss
(Reuters) – Billionaire investor James Simons, the Cold War-era mathematician and codebreaker who founded one of the world’s best-known and most profitable hedge funds, Renaissance Technologies, has died at age 86, his fund said on Friday.
The Simons Foundation did not release a cause of death.
Sixty years ago, Simons, who preferred to be called Jim, changed gears from teaching math and working for US intelligence to investing. His innovative use of computer signals to make trading decisions earned him the nickname “King of the Quants.”
With a fortune estimated by Forbes at $31 billion, Simons also became a prominent philanthropist, donating billions of dollars during his lifetime to support medical and scientific research, teaching and Democratic candidates.
“Churchill said: “The great and the good are rarely the same person.” Jim Simons was the exception that proved Churchill’s rule,” said Clifford Asness, managing director and founder of AQR Capital Management, referring to British wartime Prime Minister Winston Churchill.
As a mathematician, Simons is accustomed to working with large amounts of data and easily finding patterns to guide buying and selling.
He founded Renaissance in 1978 in East Setauket, New York, 70 miles east of Wall Street. He quickly developed a new way of investing, laying the foundation for quantitative trading, which dozens of firms have begun using in recent years.
“We hire physicists, mathematicians, astronomers and computer scientists, and they generally don’t know anything about finance,” Simons said at a conference in New York in 2007. “We didn’t hire from Wall Street at all,” he added.
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On Wall Street, Simons was respected, but also a little feared.
Renaissance, whose Medallion fund delivered average annual returns of more than 60% over three decades, became one of the most successful hedge funds in the world under Simons’ leadership. He stepped down as CEO in 2010 and will step down as chairman in 2021.
Simons hid how his firm made money. He was described as a man who viewed markets as a code to be cracked, Wall Street Journal writer Gregory Zuckerman wrote in his 2019 book “The Man Who Solved the Market.”
Medallion’s trading system was based on buying and selling that work in concert to produce high returns with low risk across all asset classes, in a way that patterns typically remain hidden to other traders.
In 1994, Simons and his wife Marilyn founded the Simons Foundation, which supports scientists and organizations around the world to advance the frontiers of research in mathematics and the basic sciences.
He is survived by his wife, three children, five grandchildren and a great-grandson.
“I did a lot of math. I made a lot of money and gave away almost all of it,” Simons said at a 2022 event honoring Abel Prize winners who were recognized for their mathematical achievements.
“This is the story of my life.”