James (Jim) Harris Simons passed away in May this year, following a pioneering life at the cutting edge of mathematics and quantitative investment management, as well as a notable philanthropist.
After graduating 1962 from Berkeley with a PhD in Mathematics, Simons worked with the National Security Agency (NSA) on breaking codes.
Later he was on the research staff of the Communications Research Division of the Institute for Defense Analysis (CRD of IDA). He also taught mathematics at the Massachusetts Institute of Technology (MIT) and Harvard University.
In 1976 he received the Oswald Veblen Prize of the American Mathematical Society, the highest accolade in the sub-discipline of geometry.
Simons founded hedge fund firm Monemetrics, which was later renamed to Renaissance Technologies, in 1978. He was among the first individuals to realise that cutting edge mathematics could be applied to the world of investment.
Renaissance has taken the approach of primarily employing specialists with non-financial yet heavily quantitative backgrounds, including mathematicians, physicists and statisticians.
This insight has reaped spectacular success for the business. The firm’s flagship Medallion Fund returned more than 60% per annum across the 30 years after it was founded in 1988.
The Medallion fund was closed to new investors outside the firm in 1993. Due to the lack of public information about its strategy, the means by which its immensely talented staff have managed to generate these returns has posed a mystery.
“The secret sauce is hiring great people, providing a great infrastructure, collaborating across the board, and sharing profits with everyone”, Simons said.
“We search through historical data looking for anomalous patterns that we would not expect to occur at random. Our scheme is to analyse data and markets to test for statistical significance and consistency over time.”
Jim Simons Net Worth: $31 Billion
In 2020 alone, Simons personally earned an estimated $2.6 billion from investments managed by Renaissance Technologies. According to Forbes, his net worth sat at $31 billion as of April 2024.
The keen philanthropist donated more than $4 billion to charitable causes throughout his life, mainly through the Simons Foundation he co-founded with his wife Marilyn Simons in 1994.
Among these are Math for America, an organisation which he founded in 2005 which aims to promote recruitment and retention of mathematics teachers in New York City secondary schools.
He was also a big financial supporter of his undergraduate university, the Massachusetts Institute of Technology (MIT), as well as his graduate university Berkeley.
Simons and his wife also made record-setting healthcare donations, including a $150 million donation to Stony Brook, which went to research in medical sciences in 2011.
Robin has more than six years of experience as a financial journalist, most of which were spent at Citywire, and covers the latest developments in the investing, trading and currency transfer space. Outside of work, he enjoys reading literature and philosophy and playing the piano.
You can contact Robin at robin@goodmoneyguide.com
