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Overview
Highlights
- Simons is regarded as “the greatest investor” on Wall Street.
- Net worth 23.5 Billion
- Jim Simons is the founder of Renaissance Technologies, one of the most successful quant trading hedge funds that manages about $80 billion.
- Founder of the Medallion Fund, a $10 billion blak-box strategy that is only open to Renaissance's owners and employees.
- Simons has given $2.7 billion to philanthropic causes. His foundation is the primary funder of Math For America.
- Simons is a prize-winning mathematician, having taught at Harvard and MIT. He also used to chair the math department at Stony Brook University and was a codebreaker for the U.S. during the Vietnam War.
- In 1976, at 38, Simons won the American Mathematics Society's Veblen Prize geometry world's highest honor -- for his work in the excruciatingly esoteric field of differential geometry
- most famous work is his 1974 paper "Characteristic Forms and Geometric Invariants,"
- retired in 2010, but he still plays a role at Renaissance and benefits from its funds.
- From 2004 to 2007, he reportedly received the largest compensation among his hedge fund manager counterparts, $670 million, $1.5 billion, $1.7 billion, and $2.8 billion respectively—three years in a row.
His "EDGE"
- Elite mathematics and pattern recognition background.
- Pioneer quant and advance trading strategies.
- Was able to execute their thesis in a time when it was easier to take advantage of abnormalities in the market because the market was less efficient.
- Focus on the science of trading, which established a unique culture that fostered collaboration, and unique insight. He focused on hiring individuals from a scientific and technical background. which bred a great amount of success.
- Had a separate fund for employees and partners (medallion) which paid out every 6 months. This led to virtually no staff turnover.
Early life
Jim was born in Brookline, Massachusetts in 1938. He quickly developed a love for mathematics early on, and as a 14-year-old subpar floor sleeper in at a garden store, had big ambitions of becoming a mathematician at MIT. Which he accomplished in 1955, and of course majored in mathematics. He also studied at Cal-Berkley for his doctorate in mathematics. Which he was able to complete in one year at the age of 23. he went on to teach mathematics at MIT and Harvard. During his time there, he and a few MIT classmates invested in a Colombian floor tile and pipe company. Simons didn't get really hooked on trading until the early 1970s when he was at Stony Brook. In 1973 the tile company got sold, and he turned the proceeds over to a mathematician he knew who was trading commodities. "In eight months he had multiplied my money by ten times," says Simons. In 1964 the Institute for Defense Analyses (IDA) recruited Simons, where he played a key role as a code breaker during the Vietnam War. After four years he was fired by IDA for criticizing the media representation of the war, he then went on to become the chairman of the mathematics department at Stony Brook University. He didn't turn his attention onto finance until 1978.
Rennasaince tech and Medallion fund
Simons founded the private investment fund Limroy. Initially, he took a fundamental approach, trying to predict factors like Federal Reserve Board policy and interest rate movements. Over the next ten years, Limroy grew initial capital 25 times by investing in everything from venture capital to technical currency trading. In 1988 Simons decided to focus solely on trades, he then launches Renaissance Technologies and the Medallion fund. This time he decided to solely use quantitative analysis to decide which trades to enter. Their strategy rapid, short-term trading across futures markets. In the early years, the types of inefficiencies that could be exploited by quantitative trading abounded. The firm made money by simply arbitraging Treasury bills against Treasury futures contracts. Simons also focused on the "science" of the deal hiring mostly people from scientific-related fields such as mathematicians, astrophysicists, data scientists, and computer scientists. Medallion allegedly only had two employees from a financial background. They focused on speeding up systems, studying how to optimize risk allocation, and determining complex trading strategies. The culture encouraged open collaboration in-house, and secrecy outside of the workplace. Since its inception in March 1988, Simons' flagship $3.3 billion Medallion fund, has amassed annual returns of 35.6 percent, compared with 17.9 percent for the Standard & Poor's 500 indexes. For the 11 full years ended December 1999, Medallion's cumulative returns are an eye-popping 2,478.6 percent which outperformed all offshore funds over that same period. Simons through the Medallion fund averages 66% for His lifetime annual return rate.
Private equity
Performance
- Generated 100 billion in trading profits
- Outperformed all offshore funds from1988-1999 with 2,478.6%
- Jim Simons' Renaissance Technologies posted a 39% gain before fees at its flagship Medallion fund this year through April 14, The Wall Street Journal reported.
- Renaissance’s flagship Medallion Fund generated 66% annualized returns (before fees) and 39% annualized returns (net of fees) from 1988-2018.
More info
https://www.amazon.com/Man-Who-Solved-Market-Revolution/dp/073521798X
Sources
https://www.forbes.com/profile/jim-simons/#1fae62ab3b6a
https://www.institutionalinvestor.com/article/b151340bp779jn/the-secret-world-of-jim-simons