Jim Simons

• 1. Introduction

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  Jim Simons, born James Harris Simons, once explained his dislike of publicity by borrowing a line from Benjamin the Donkey in Animal Farm. "God gave me a tail to keep off the flies. But I'd rather have had no tail and no flies. That's kind of the way I feel about publicity." The man who said this rarely gave interviews. Yet he founded Renaissance Technologies, a firm whose results led admirers to call him the most successful hedge fund manager of all time. He was also a working geometer, and his equations still turn up in physics. How does a researcher of curved spaces end up running one of the most profitable funds ever? Why did a Senate subcommittee and the IRS come after that fund? And where did the fortune go?

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• 2. Curved Spaces

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  James Harris Simons was born on the 25th of April 1938, the only child of Marcia, whose maiden name was Kantor, and Matthew Simons. The family was Jewish and lived in Brookline, Massachusetts.

  In 1958 he graduated from the Massachusetts Institute of Technology with a mathematics degree that he finished in only three years. Then he left Boston on a motor scooter and rode to Bogota, Colombia. He earned his doctorate at the University of California, Berkeley, in 1961, at age 23. His supervisor was Bertram Kostant.

  His thesis gave a new proof of Berger's classification of the holonomy groups of Riemannian manifolds. Manifolds are shapes that look flat up close, like the surface of a ball. Holonomy groups describe how such shapes bend.

  Shiing-Shen Chern became his collaborator on the theory of characteristic classes. That work led the pair to the Chern-Simons secondary characteristic classes of 3-manifolds. Later, the mathematical physicist Albert Schwarz found an application of the Chern-Simons form in an early topological quantum field theory. The same form is related to the Yang-Mills functional on 4-manifolds. It also helped string theory by offering a framework that joined geometry and topology with quantum field theory.

  The American Mathematical Society gave Simons its Oswald Veblen Prize in Geometry in 1976. In 2014 he was elected to the U.S. National Academy of Sciences, an honor for a career that had by then taken a very different turn.

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• 3. Codes and Protest

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  In 1964, Simons worked with the National Security Agency to break codes. From 1964 to 1968 he sat on the research staff of the Communications Research Division of the Institute for Defense Analysis. During those years he also taught mathematics at the Massachusetts Institute of Technology and at Harvard University.

  Richard Leibler was one of the colleagues who joined Simons in an attempt to start a trading company called iStar. Management discovered the effort, and it failed.

  Simons also spoke out publicly against the Vietnam War. That opposition forced him to leave the institute.

  In 1968 he joined the faculty at Stony Brook University. From 1968 to 1978 he chaired its mathematics department.

  IBM came to him in 1973 with a request to attack Lucifer, a block cipher. Lucifer was an early and direct precursor to the Data Encryption Standard. His decade leading the Stony Brook department planted a tie to that university that would last for decades.

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• 4. The Medallion Fund

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  Monemetrics was the name of the hedge fund management firm that Simons first founded, and he later renamed it Renaissance Technologies. The firm is based in East Setauket, New York. Simons gradually realized that the data he was collecting could be turned into mathematical models. He hired mathematicians, among them Leonard E. Baum and James Ax. In 1988 Renaissance established the Medallion Fund. The firm became known as a quantitative investor, using models and algorithms to profit from inefficiencies in markets.

  The Medallion Fund is closed to outside investors. It has earned more than $100 billion in trading profits since 1988. Between 1988 and 2018 that amounted to an average gross annual return of 66.1 percent, or 39.1 percent after fees.

  Three other funds are managed by Renaissance and are open to outsiders. They are the Renaissance Institutional Equities Fund, known as RIEF, Renaissance Institutional Diversified Alpha, and the Renaissance Institutional Diversified Global Equity Fund. As of April 2019 they held approximately $55 billion in combined assets.

  In 2008 the Medallion Fund surged 80 percent despite hefty fees. Only current and past employees and their families could invest in it. RIEF was owned by outsiders and lost money in both 2008 and 2009, falling 16 percent in 2008. According to The Wall Street Journal in May 2009, investors questioned Simons about the gap.

  Edward Witten, a physics professor at the Institute for Advanced Study in Princeton, New Jersey, is considered by many of his peers to be the most accomplished theoretical physicist alive. He said of Simons: "It's startling to see such a highly successful mathematician achieve success in another field."

  In 2004 Simons earned an estimated $670 million. In 2005 the estimate was $1.5 billion, the largest compensation among hedge fund managers that year, and in 2007 it was $2.8 billion. In 2006 the International Association of Financial Engineers named him Financial Engineer of the Year.

  On the 10th of October 2009 he announced that he would retire on the 1st of January 2010 but stay at Renaissance as nonexecutive chairman. Stepping back did not end the paychecks. In 2014 he reportedly earned $1.2 billion, counting a share of the firm's fees, cash compensation, and stock and option awards.

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• 5. Washington and the IRS

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  According to OpenSecrets, Simons was the fifth-largest donor to federal candidates in the 2016 election cycle. Robert Mercer, a co-CEO of Renaissance Technologies who generally donates to Republicans, ranked first. Simons was a major contributor to Democratic Party political action committees. He gave $7 million to Hillary Clinton's Priorities USA Action, $2.6 million to the House and Senate Majority PACs, and $500,000 to EMILY's List. He also gave $25,000 to the super PAC of Republican senator Lindsey Graham.

  In August 2020 he donated $1.5 million to the Senate Majority PAC, a Democratic super PAC. From 2006 on, Simons contributed about $30.6 million to federal campaigns. Since 1990 Renaissance Technologies has given $59,081,152 to federal campaigns, and it had spent $3,730,000 on lobbying as of 2016.

  On the 22nd of July 2014, the U.S. Senate Permanent Subcommittee on Investigations condemned Simons in a bipartisan finding. The target was the use of complex basket options. Day-to-day trading is usually taxed as ordinary income at higher rates. The options were used to treat those trades as long-term capital gains. Senator John McCain, the committee's ranking Republican, said in his opening statement: "Renaissance Technologies was able to avoid paying more than $6 billion in taxes by disguising its day-to-day stock trades as long term investments."

  In 2015, The New York Times reported that Renaissance was under IRS review over a loophole that saved the fund an estimated $6.8 billion in taxes across roughly a decade. In September 2021 it was announced that Simons and his colleagues would pay billions of dollars in back taxes, interest and penalties. The settlement ended one of the biggest disputes in IRS history.

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• 6. Giving It Away

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  More than $4 billion is the total Simons gave to philanthropic causes. In 1994 he and his wife, Marilyn Hawrys Simons, co-founded the Simons Foundation. It supports projects in education, health and scientific research. In 2003 the foundation started the Simons Foundation Autism Research Initiative, called SFARI, to improve understanding, diagnosis and treatment of autism spectrum disorders.

  Math for America began in 2004 with an initial pledge of $25 million from the foundation, which Simons doubled in 2006. The nonprofit aims to improve mathematics teaching in U.S. public schools by recruiting more highly qualified teachers. The foundation contributed nearly $22 million to its operations in 2018.

  At MIT, his undergraduate school, the couple and their foundation paid to renovate the building that houses the mathematics department. It was named in their honor in 2016. They also endowed the Simons Center for the Social Brain. Simons was a life member emeritus of the MIT Corporation.

  In 2012 the foundation pledged $60 million to Berkeley to establish the Simons Institute for the Theory of Computing. In 2020 it made separate grants to Berkeley totaling over $46 million, to raise the institute's endowment and support its operations. In October 2023 came an additional $25 million as a matching pledge. Simons and his wife also made major grants to the Simons Laufer Mathematical Sciences Institute and to Berkeley Lab.

  The Flatiron Institute was established by the foundation in 2016 to house five groups of computational scientists. Each group has 60 or more researchers with PhDs. Its centers cover biology, astrophysics, quantum mechanics, mathematics and neuroscience.

  Stony Brook was the alma mater of Marilyn Simons, and it received some of the largest gifts of all. In 2006 the couple gave $25 million, then the largest donation ever to a State University of New York school. On the 27th of February 2008, Governor Eliot Spitzer announced a $60 million gift to found the Simons Center for Geometry and Physics. It was the largest gift to a public university in New York state history.

  In 2011 the couple broke that record again with $150 million. The money went to medical sciences, a life sciences building, a neurosciences institute and a center for biological imaging. It also funded the study of cancer and infectious diseases, 35 new endowed professorships and 40 graduate fellowships. To secure the gift, Stony Brook was allowed to raise its annual tuition, against traditional state policy.

  In 2023 the university announced a $500 million endowment gift from the foundation. It is the second-largest gift ever to a public university in the United States.

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• 7. Private Life

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  Archimedes was the name of Simons's motor yacht. The Dutch builder Royal Van Lent made it, and it was delivered to him in 2008.

  Two packs a day of Merit cigarettes was the habit for which Simons was known. He also did not wear socks.

  Simons was married twice and had five children. In 1996 his son Paul, aged 34, was killed in a car accident while riding his bicycle on Long Island. Paul was the son of Simons and his first wife, Barbara Simons.

  In 2003 his son Nicholas, aged 24, drowned on a trip to Bali, Indonesia. Nick had worked in Nepal.

  Avalon Nature Preserve, a 130-acre preserve in Stony Brook, was established in memory of Paul. It was extended to 216 acres in 2024. The Simonses also became large donors to Nepalese healthcare through the Nick Simons Institute.

  Liz Simons founded the Heising-Simons Foundation. Nathaniel Simons founded the Sea Change Foundation, and Audrey Simons founded the Foundation For A Just Society. All three surviving children run charities of their own.

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• 8. Legacy and Honors

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  On the 10th of May 2024, Simons died peacefully in New York City at age 86, surrounded by his family. He stayed active in the work of his foundation until the end. At his death, his net worth was estimated at $31.4 billion, which made him the 55th-richest person on the 2024 Forbes World's Billionaires list.

  Forbes had put his net worth at $21.6 billion in October 2019. By 2023 it was $30 billion, and he ranked 25th on the Forbes 400.

  The Financial Times named him "the world's smartest billionaire" in 2006. In 2007 he was elected to the American Philosophical Society. Institutional Investor Alpha inducted him into its Hedge Fund Manager Hall of Fame in 2008. In 2011 Bloomberg Markets Magazine included him in its 50 Most Influential ranking.

  Honorary doctorates came from York University and the University of Edinburgh in 2016, and from Trinity College Dublin in 2018.

  Gregory Zuckerman wrote a book about Simons and his investing methods, released in 2019. Its title is The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.

  In 2016 the International Astronomical Union named asteroid 6618 Jimsimons in honor of his contributions to mathematics and philanthropy. Clyde Tombaugh had discovered it in 1936, two years before Simons was born.

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