Jim Simons
Who
Jim Simons is king of the "black box" hedge fund managers and the billionaire founder of the quantitative, technology-driven firm Renaissance Technologies.
Backstory
The son of a shoe factory owner, Simons attended MIT and earned his PhD at Berkeley, where he soon emerged as one of the most promising young mathematicians in academia. Settling into a life of teaching and research, Simons spent a number of years as a faculty member at MIT and Harvard, departing the ivory tower for several years during the Vietnam war when he broke military codes as a cryptanalyst for the government. He later became chair of the math department at Stony Brook, earning fame—well, in the world of theoretical physics—for his research on geometric measurements and for a theory that would become known as Chern-Simons invariants.
In 1982, Simons bolted for the faster-paced investment world and established Renaissance Technologies. He's since used his mathematical prowess to develop trading techniques that have made his hedge fund one of the largest—and most successful—in the world. From offices in Midtown, East Setauket, Long Island, London, and San Francisco, Renaissance now manages more than $35 billion, including his famed $6 billion Medallion Fund, which relies on complex trading algorithms to trade everything from cotton futures to Italian government bonds. But he hasn't forgotten entirely about the lofty towers of academia: Simons's own office is decorated with paintings of ancient Greeks teaching mathematics, like Socrates and Archimedes.
Of note
Like fellow hedge fund manager David Shaw, Simons hires mathematicians and other brainy PhDs (rather than professional traders or MBAs) to help him perfect the quantitative programs that detect pricing trends in the commodity and financial futures markets. Over more than two decades, his investment strategy has paid off nicely for investors, who fork over as much as 5 percent in management fees and up to 44 percent of their profits for the chance to co-invest with "Elvis" in his Medallion Fund. Of course, it pays off nicely for Simons, too: He has long been one of the highest-paid hedge fund managers in the industry. But his near-perfect rep has taken a bit of a hit since the credit crisis unfolded in 2007. Although he managed to turn in a solid performance in 2007—his flagship Medallion fund returned an astonishing 73 percent return—many of his funds fell sharply in early 2008.
Keeping score
Simons has long been one of the highest paid hedge fund managers in the business. In 2005, he reportedly took home $1.5 billion and he collected an estimated $1.7 billion in 2006. He did pretty well for himself in 2007, even though he fell to third place on the list of the highest paid hedge fund managers. He walked away with an estimated $1.3 billion, according to Alpha magazine. He's worth $7.4 billion, according to Forbes, which makes him the 41st richest person in America.
In person
Famously secretive, the bearded Simons typically avoids the press and requires all of his employees to sign voluminous confidentiality agreements that prohibit them from discussing any aspect of Renaissance's trading strategy in perpetuity. Simons means business: Renaissance took two former Ph.D.-level researchers to New York State Supreme Court for "appropriating trade secrets."
Pet causes
Simons typically directs his philanthropy at and math and science programs. He's donated an estimated $100 million to Stony Brook over the years, including a record-setting $60 million gift in 2008. (The new gift will be used for the Simons Center for Geometry and Physics.) In 2006, he donated $50 million to Math for America, a program aimed at improving basic math and science education in the city by boosting salaries and teachers' qualifications. Other gifts in 2006 included a $13 million donation to support research at Brookhaven National Laboratory, and multi-million gifts to Columbia, Rockefeller University, MIT, Berkeley and Yale. He's also been a big donor in the field of autism research, a disease which afflicts his younger daughter.
Personal
With his first wife, Barbara, Simons had two children: Nathaniel, who works for his father and manages the Meritage fund of funds out of San Francisco; and Paul, who died in a car accident in 1996. His second wife is Marilyn Hawrys Simons, who earned a Ph.D. in economics from Stony Brook. They have three kids, including two daughters, Elizabeth and Audrey. A son, Nick, drowned in Bali at the age of 24 in 2003. The couple lives on a six-acre estate in East Setauket, have an apartment on Fifth Avenue (fellow hedge fund manager George Soros is a neighbor), and a condo in Boca Raton, Fla.