In Memoriam: Jim Simons, the Billionaire Quantitative Investment Pioneer

Jim Simons, the mathematician who established the most prosperous quantitative hedge fund in history, sadly passed away in New York City, as announced by his foundation on their website.

Simons, a pioneer in utilizing mathematical models and algorithms for investment decisions, leaves behind a legacy at Renaissance Technologies that competes with the likes of renowned figures such as Warren Buffett and George Soros. His Medallion Fund boasted annual returns of 66% from 1988 to 2018, as documented in Gregory Zuckerman’s book “The Man Who Solved the Market.”

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During the Vietnam War era, Simons served as a codebreaker for U.S. intelligence, keeping tabs on the Soviet Union and successfully deciphering a Russian code.

Simons, who obtained his bachelor’s degree in mathematics from the Massachusetts Institute of Technology in 1958 and his Ph.D. in mathematics from the University of California, Berkeley at just 23, founded what would become Renaissance in 1978 at 40 years old, after leaving academia to try his hand at trading.

In contrast to most investors who analyze fundamentals like sales, earnings, and profit margins to determine a company’s value, Simons exclusively used an automated trading system to exploit market inefficiencies and trading patterns.

“I don’t have any opinions on individual stocks. … The computer has its views, and we faithfully adhere to them,” Simons stated in a CNBC interview in 2016. His Medallion Fund generated over $100 billion in trading profits between 1988 and 2018, with an annualized return of 39% after fees. The fund stopped accepting new money in 1993, and Simons permitted his employees to invest in it starting in 2005.

Quantitative strategies reliant on trend-following models have seen a surge in popularity on Wall Street since Simons transformed trading in the 1980s. Quant funds now represent more than 20% of all equity assets, as estimated by JPMorgan.

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At the time of his death, Simons’ net worth was estimated to be around $31.4 billion, according to Forbes.

The quantitative expert previously headed the math department at Stony Brook University in New York, and his mathematical innovations have significantly contributed to fields such as string theory, topology, and condensed matter physics, as stated by his foundation.

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Simons and his wife founded the Simons Foundation in 1994 and have donated billions of dollars to philanthropic endeavors, including those that support research in math and science.

He remained active in the foundation’s work until his final days. Simons is survived by his wife, three children, five grandchildren, and a great-grandchild.