Using advanced computers, he went from M.I.T. professor to multibillionaire. His Medallion fund had 66 percent average annual returns for decades.
Jim Simons 2007. After publishing breakthrough studies in advanced mathematics, he decided to apply his genius to a more prosaic subject — making as much money as he could. Credit...Mark Lennihan/Associated Press
Jim Simons, the prizewinning mathematician who abandoned a stellar academic career, then plunged into finance — a world he knew nothing about — and became one of the most successful Wall Street investors ever, died on Friday in his home in Manhattan. He was 86.
His death was confirmed by his spokesman, Jonathan Gasthalter, who did not specify a cause.
After publishing breakthrough studies in pattern recognition, string theory and a framework that combined geometry and topology with quantum field theory, Mr. Simons decided to apply his genius to a more prosaic subject — making as much money as he could in as short a time as possible.
So at age 40, he opened a storefront office in a Long Island strip mall and set about proving that trading commodities, currencies, stocks and bonds could be nearly as predictable as calculus and partial differential equations. Spurning financial analysts and business school graduates, he hired like-minded mathematicians and scientists.
Mr. Simons equipped his colleagues with advanced computers to process torrents of data filtered through mathematical models, and turned the four investment funds in his new firm, Renaissance Technologies, into virtual money printing machines.
Medallion, the largest of these funds, earned more than $100 billion in trading profits in the 30 years following its inception in 1988. It generated an unheard-of 66 percent average annual return during that period.
That was a far better long-term performance than famed investors like Warren Buffett and George Soros achieved.
“No one in the investment world even comes close,” wrote Gregory Zuckerman, one of the few journalists to interview Mr. Simons and the author of his biography, “The Man Who Solved the Market.”
By 2020, Mr. Simons’s approach to the market — known as quantitative, or quant, investing — accounted for almost a third of Wall Street trading operations. Even traditional investment firms that relied on corporate research, instinct and personal contacts felt compelled to adopt some of Mr. Simons’ computer-driven methodology.
For much of its existence, Renaissance funds were the largest quant funds on Wall Street, and its style of investing spurred a sea change in the way hedge funds traded and made money for their wealthy investors and pension funds.
By the time he retired as chief executive of the business in 2010, Mr. Simons was worth $11 billion (almost $16 billion in today’s currency), and a decade later his fortune had doubled.
While he continued to oversee his funds as Renaissance chairman, Mr. Simons increasingly devoted his time and wealth to philanthropy. The Simons Foundation became one of the largest private funders of basic science research. And his Flatiron Institute used Renaissance analytical techniques for research into biology, astronomy and quantum physics.
In 2011, his foundation gave $150 million to Stony Brook University, with most of the money going to research in medical sciences. It was the biggest gift ever bestowed in the history of the State University of New York, and at the time it was called the sixth largest donation ever made to an American public university.
Mr. Simons in 2005. Over 30 years his investment firm generated an unheard-of 66 percent average annual return
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