Jim Simons, billionaire investor, dies at age 86 in the USA

Mathematician Jim Simons, billionaire pioneer in quantitative investments and known as the “King of Quant” passed away this Friday (10) at the age of 86, leaving behind his wife and three children. The news released by his scientific research organization, the Simons Foundation, did not provide the cause of death.

Forbes estimates Simons' fortune at US$31.4 billion and ranks the mathematician as the 51st richest person in the world at the time of his death. The creator of quantitative analysis became a billionaire investor and philanthropist by creating what many in the financial industry consider the world's biggest money-making machine at his company, Renaissance Technologies.

At age 40, as he transitioned from academia to investing, Simons eschewed standard management practices in favor of quantitative analysis, finding patterns in data that predicted price changes. His successful technique made him the “King of Quant”.

Life path

James Harris Simons was born on April 25, 1938, in Boston and was an only child. His father, Matthew Simons, worked in the film industry as a sales representative for 20th Century Fox. Demonstrating facility with numbers from the age of three, at a young age he earned a bachelor's degree in mathematics from MIT (Massachusetts Institute of Technology) in 1958 after three years of study, returning in 1961 to begin his teaching career. During his doctorate at the University of California, Berkeley, he experienced the world of investing for the first time, at a Merrill Lynch brokerage in San Francisco to trade soybean futures.

His achievements as a mathematician contributed to academic fields such as string theory, topology, and condensed matter physics. In 1964, after teaching at Harvard University, Simons moved to New Jersey, where he worked at the Institute for Defense Analyzes.

The nonprofit research organization hired mathematicians to support the U.S. National Security Agency in cracking codes used by the Soviet Union during the Cold War. In this work, he can explore the possibilities of creating algorithms for computers. And employees were allowed to devote half their time to personal work, so Simons devoted part of his time to forecasting short-term movements in the stock market.

A few years later, he returned to academia by chairing the mathematics department at the State University of New York. Together with Shiing-Shen Chern, he created the Chern-Simons theory in 1974. This theory provides the tools, known as invariants, that mathematicians use to distinguish between certain curved spaces – the types of distortions of ordinary space that exist according to with Albert Einstein's general theory of relativity.

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_{Tribute to the mathematician in 2019 at the IAS Einstein Gala, in New York (Photo: Reproduction/Getty Images embed/Patrick McMullan/Silvan Gaboury)}

Passion for the Stock Exchange

While chairing the mathematics department and taking advantage of the connections he had made through his work in cryptography, Simons took up stock exchange trading, buying and selling commodities. To make the experiment more interesting, he turned to his network of cryptographers and mathematicians for help analyzing patterns.

In 1978, he permanently left academia to become a manager and founded Moneymetrics, which used mathematical models to trade currencies. His team concluded that the models worked not only with currencies, but also with any commodity futures.

In 1982, he founded Renaissance Technologies, a hedge fund specializing in quantitative trading. The initiative has established itself as one of the best-performing investment managers in history. The company currently manages $106 billion in assets and has become famous for its $10 billion Medallion Fund known for its consistent earnings and accessible only to Renaissance owners and employees. Simons has committed to donating the majority of his wealth to charities.

In 1994, in partnership with his wife Marilyn, he founded the New York-based Simons Foundation, which supports research in mathematics, science and autism. He also founded Math for America, which offers scholarships to math and science teachers in New York City public schools.

Featured photo: Jim Simons (Reproduction/Disclosure/Simons Foundation)