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May 10 (Reuters) – Billionaire investor James Simons, the mathematician and Cold War code-breaker who founded one of the world’s most prominent and profitable hedge funds, Renaissance Technologies, has died, his foundation said on Friday.
Simons, who was 86, founded in 1978 what would become the hedge fund Renaissance Technologies. The top-performing firm only hired scientists to develop its trading strategies, all of which were executed entirely by computers.
“We hire physicists, mathematicians, astronomers and computer scientists and they typically know nothing about finance,” Simons, who previously taught math at Massachusetts Institute of Technology and Harvard, told a 2007 New York conference.
“We haven’t hired out of Wall Street at all.”
Based in New York, Renaissance employs mathematical and statistical methods in the design and execution of its investment programs, the firm says on its website.
Renaissance became one of the world’s most successful hedge funds under Simons, who retired and stepped down as CEO in 2010.
Simons, who preferred to be called Jim, was secretive about how his firm made money. Renaissance focused on liquid financial instruments and avoided credit default swaps and collateralized debt instruments.
The 2019 book, “The Man Who Solved the Market,” a biographical account of his life by Gregory Zuckerman described Simons as someone who viewed the markets as a code to be cracked. He collected and scrubbed enormous amounts of data in the search for statistically significant patterns.
Zuckerman highlighted Simons’ Medallion trading system worked by designing a multitude of trades that work in concert to generate high returns at low risk across asset classes, in such a way that patterns normally remain hidden to other traders.
Simons was a master code breaker during the Vietnam war and worked with the National Security Agency. He also taught mathematics at MIT and Harvard University before he founded Renaissance.
In 1994, he along with his wife established the Simons Foundation, which supports scientists and organizations worldwide in advancing the frontiers of research in mathematics and the basic sciences.
Simons is survived by his wife, three children, five grandchildren, and a great-grandchild. (Reporting by Jaiveer Singh Shekhawat and Niket Nishant in Bengaluru; Editing by Shailesh Kuber)
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