Average Annualised Returns:
Mr. Simons received his bachelor of science in Mathematics from the Massachusetts Institute of Technologies in 1958. At the age of 23 in 1961, he received his Doctor of Philosophy in Mathematics from the University of California, Berkeley. He worked as a research staff at the communications research division of the Institute for Defense Analyses and taught mathematics at both MIT and Harvard. He was appointed chairman of the math department at Stony Brook University in 1968 and won the American Mathematical Society’s Oswald Veblen Prize in Geometry in 1976. Simons’ seminal work on geometric invariants resulted in the Chern-Simons Form (also known as Chern-Simons theory), widely used in String Theory of theoretical physics. The Financial Times named him “the world’s smartest billionaire” in 2006. Mr. Simons retired from RenTech in January 2010 (though he continues to hold the Chairman’s position) and the firm is now run by Bob Mercer and Peter Brown – two computer science Ph.Ds who were doing “code-breaking research for the Defense Department” before joining in 1993.
Renaissance employs mathematical and statistical models for high frequency trading and tries to exploit market inefficiencies when large transactions take place. One of their trading algorithms tries to establish if large transactions have been executed and front runs it. This in turn pushes up transaction costs and related expenses. The hedge funds managed by RenTech charge 5% fixed fee and 44% performance fee – one of the highest in the hedge-fund investment world.
“Jim Simons is without question one of the really brilliant people working in this business. He is a first-rate scholar, with a genuinely scientific approach to trading. There are very few people like him,” said David Shaw, chairman of D.E Shaw and star quantitative trader.