James Harris Simons

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James Harris Simons
James Simons 2007.jpg
Simons speaking at the Differential Geometry, Mathematical Physics, Mathematics and Society conference in 2007 in Bures-sur-Yvette.
Born 1938 (age 75–76)
Newton, Massachusetts
Alma mater Massachusetts Institute of Technology (BS)
University of California, Berkeley (PhD)
Occupation Founder and CEO of Renaissance Technologies
Net worth Increase $12.5 billion (March 2014)[1]
Spouse(s) Barbara Simons
Marilyn Hawrys Simons[2]
Children 3[2]
Parents Matthew Simons
Marcia Kantor
Awards Oswald Veblen Prize (1976)[3]

James Harris "Jim" Simons (born 1938) is an American mathematician, hedge fund manager, and philanthropist. Considering his background as a code breaker and an expert in pattern recognition[4] some also consider him as one of the pioneers of financial signal processing.

Simons taught mathematics at Stony Brook University on Long Island in New York.

In 1982, Simons founded Renaissance Technologies, a private hedge fund investment company based in New York with over $15 billion under management. Simons retired at the end of 2009 as CEO of one of the world's most successful hedge fund companies.[5] Simons' net worth is estimated to be $12.5 billion.[1]

Simons lives with his wife Marilyn H. Simons in Manhattan and Long Island, and is the father of five children; two of his children died young under tragic circumstances—a drowning and an auto accident.

Simons shuns the limelight and rarely gives interviews, citing Benjamin the Donkey in Animal Farm for explanation: "God gave me a tail to keep off the flies. But I'd rather have had no tail and no flies."[6] On October 10, 2009, Simons announced he would retire on January 1, 2010 but remain at Renaissance as nonexecutive chairman.[7]

Early life and education[edit]

James Harris Simons was born to a Jewish family,[8][9] the only child of Marcia (née Kantor)[10] and Matthew Simons, and raised in Brookline, Massachusetts.[11] His father owned a shoe factory.[12]

He received a Bachelor of Science in mathematics from the Massachusetts Institute of Technology in 1958[13]and a Ph.D., also in mathematics, from the University of California, Berkeley, under supervision of Bertram Kostant in 1961, at the age of 23.[13]

Business career[edit]

For more than two decades, Simons' Renaissance Technologies' hedge funds, which trade in markets around the world, have employed mathematical models to analyze and execute trades, many automated. Renaissance uses computer-based models to predict price changes in easily-traded financial instruments. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions.

Renaissance employs many specialists with non-financial backgrounds, including mathematicians, physicists, signal processing experts and statisticians. The firm's latest fund is the Renaissance Institutional Equities Fund (RIEF).[14] RIEF has historically trailed the firm's better-known Medallion fund, a separate fund that only contains the personal money of the firm's executives.[15]

"It's startling to see such a highly successful mathematician achieve success in another field," says Edward Witten, professor of physics at the Institute for Advanced Study in Princeton, NJ, and considered by many of his peers to be the most accomplished theoretical physicist alive... (Gregory Zuckerman, "Heard on the Street", Wall Street Journal, July 1, 2005).

In 2006, Simons was named Financial Engineer of the Year by the International Association of Financial Engineers. In 2007, he was estimated to have personally earned $2.8 billion,[16] $1.7 billion in 2006,[17] $1.5 billion in 2005,[18] (the largest compensation among hedge fund managers that year)[19] and $670 million in 2004.

Academic and scientific career[edit]

In 1964, Simons worked with the National Security Agency to break codes.[20] Between 1964 and 1968, he was on the research staff of the Communications Research Division of the Institute for Defense Analyses (IDA) and taught mathematics at the Massachusetts Institute of Technology and Harvard University, ultimately joining the faculty at Stony Brook University. In 1968, he was appointed chairman of the math department at Stony Brook University.

Simons was asked by IBM in 1973 to attack the block cipher Lucifer, an early but direct precursor to the Data Encryption Standard (DES).[21]

Simons founded Math for America. He funds a variety of research projects.

Philanthropy[edit]

Simons and his second wife, Marilyn Hawrys Simons, co-founded the Simons Foundation, a charitable organization that supports projects related to education and health, in addition to scientific research.[2] In memory of his son Paul, whom he had with his first wife, Barbara Simons, he established Avalon Park, a 130-acre (0.53 km2) nature preserve in Stony Brook. In 1996, 34-year-old Paul was killed by a car while riding a bicycle near the Simons home. Another son, Nick Simons, drowned at age 24 while on a trip to Bali in Indonesia in 2003. Nick had worked in Nepal and the Simons have become large donors to Nepalese healthcare through the Nick Simons Institute.[22][23]

Also in 2006, Simons donated $25 million to Stony Brook University through the Stony Brook Foundation.[24][25] The gift is intended to benefit the Mathematics and Physics departments at the university.

On February 27, 2008, then Gov. Eliot Spitzer announced a $60 million donation by the Simons Foundation to found the Simons Center for Geometry and Physics at Stony Brook, the largest gift to a public university in New York state history.[26]

In December 2008 it was reported that the Stony Brook University Foundation, of which Simons is chair emeritus, lost $5.4 million in Bernard Madoff’s Ponzi scheme.[27]

Political contributions[edit]

Simons is a major contributor to Democratic Party political action committees.[28]

Boardroom appointments[edit]

Simons serves as trustee of Brookhaven National Laboratory, the Institute for Advanced Study, Rockefeller University, the Mathematical Sciences Research Institute in Berkeley and a trustee of Stony Brook University.[29] He is also a member of the Board of the MIT Corporation.

Controversies[edit]

In May 2009, Simons was questioned by investors regarding the pattern of losses in a Renaissance fund owned by outside investors while the investments held by Simons and fund associates enjoyed enormous gains in value.[30]

On July 22, 2014, Simons was subject to bipartisian condemnation by the U.S. Senate Permanent Subcommittee on Investigations for the use of complex barrier options to shield day to day trading (usually subject to higher ordinary income tax rates) as long-term capital gains. “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,” said Sen. John McCain (R., Ariz.), the committee’s ranking Republican, in his opening statement. “Two banks and a handful of hedge funds developed a complex financial structure to engage in highly profitable trades while claiming an unjustified lower tax rate and avoiding limits on trading with borrowed money,” said Sen. Carl Levin (D., Mich.) in his prepared remarks.[31][32]

Simons had dealings with Bernard Madoff.[33]

Wealth[edit]

Simons earned an estimated $2.5 billion in 2008,[34] and with an estimated net worth of $12.5 billion,[1] he is ranked by Forbes as the 88th-richest person in the world[1] and the 27th-richest person in America.[1] He was named by the Financial Times in 2006 as "the world's smartest billionaire".[35]

In 2011, he was included in the 50 Most Influential ranking of Bloomberg Markets Magazine.

Simons owns a motor yacht, named 'Archimedes'. She was built at the Dutch yacht builder Royal Van Lent and delivered to Simons in 2008.[36]

See also[edit]

Notes[edit]

  1. ^ a b c d e Forbes: "The World's Billionaires: James Simons" March 2014
  2. ^ a b c Teitelbaum, Richard (January 2008). "The Code Breaker". Bloomberg Markets Magazine (Bloomberg LP). Retrieved 7 January 2010. 
  3. ^ http://www.nytimes.com/2014/07/08/science/a-billionaire-mathematicians-life-of-ferocious-curiosity.html?_r=0
  4. ^ "More Money than God". 
  5. ^ "RenTec's Jim Simons Retiring At End Of Year". Market Folly. October 8, 2009. Archived from the original on 2010-06-17. Retrieved 17 June 2012. 
  6. ^ "Seed Interview: James Simons". SEEDMAGAZINE.com. September 19, 2006. Retrieved 2013-07-23. 
  7. ^ "Renaissance Founder Simons, Computer Trading Pioneer, to Retire". Bloomberg. 2009-10-09. 
  8. ^ "The Jewish Billionaires of Forbes". jspace.com. 14 March 2012. Retrieved 7 September 2013. 
  9. ^ "Facts About James Harris Simons". Retrieved 7 September 2013. 
  10. ^ Boston Globe: "Marcia (Kantor) Simons Obituary" retrieved March 31, 2013
  11. ^ Bloomberg: "Simons at Renaissance Cracks Code, Doubling Assets (Update1)" By Richard Teitelbaum November 27, 2007
  12. ^ http://www.iimagazine.com/Article.aspx?articleID=1028172&HideRelated=1&SearchResult=1
  13. ^ a b "James Simons". Mathematics Genealogy Project. AMS. Retrieved 8 August 2014. 
  14. ^ Baker, Nathaniel (2005-06-24). "Renaissance Readies Long-Biased Strat". Institutional Investor. 
  15. ^ Zuckerman, Gregory (2005-07-01). "Renaissance's Man: James Simons Does The Math on Fund". The Wall Street Journal. pp. C1. Retrieved 2006-08-15. [dead link]
  16. ^ Andersen, Jenny (April 16, 2008). "Wall Street Winners Get Billion-Dollar Paydays". The New York Times. Retrieved 7 January 2010. 
  17. ^ Jenny Anderson and Julie Creswell (2007-04-24). "Make Less Than $240 Million? You're Off Top Hedge Fund List". New York Times. 
  18. ^ Shell, Adam (2006-05-26). "$363M is average pay for top hedge fund managers". USA Today. Retrieved 2006-08-15. 
  19. ^ "Top hedge fund manager had take-home pay of $1.5 billion in 2005 on 5% fee and 44% of gains". Finfacts.com. 2006-05-26. 
  20. ^ Broad, William (July 7, 2014). "Seeker, Doer, Giver, Ponderer: A Billionaire Mathematician’s Life of Ferocious Curiosity". New York Times. 
  21. ^ Levy, Steven (2001). Crypto: secrecy and privacy in the new code war. Penguin. p. 356. ISBN 0-14-024432-8. 
  22. ^ Nepalnews Mercantile Communications Pvt. Ltd
  23. ^ US family donates Rs 380 m medical for Nepal
  24. ^ Stony Brook University Receives $25 Million Donation | SBGradMag
  25. ^ Stony Brook Announces $25 Million Gift From Renowned Former Math Chair Jim Simons
  26. ^ Arenson, Karen W. (2008-02-27). "$60 Million Gift for Stony Brook". The New York Times. Retrieved 2010-05-05. 
  27. ^ "Simons's Stony Brook University Fund Caught in Madoff Fraud". Bloomberg. 2008-12-16. 
  28. ^ Who are the Super PACs’ Biggest Donors? By Al Shaw, ProPublica. Updated December 7, 2012
  29. ^ "Board of Trustees". Stony Brook University. Retrieved 3 Mar 2014. 
  30. ^ "Simons Questioned by Investors-Disparity Is Seen in Running of Two Renaissance Funds". The Wall Street Journal. 
  31. ^ "Simons Subject to bipartisan Condimnation for Tax Strategies". 
  32. ^ http://www.zerohedge.com/news/2014-07-21/how-rentec-made-more-34-billion-profits-1998-fictional-derivatives
  33. ^ http://www.zerohedge.com/article/there-more-meets-eye-rentec
  34. ^ Allstair, Barr (March 25, 2009). "Top managers' pay dropped 48% last year". MarketWatch. Retrieved 7 January 2010. 
  35. ^ "Alternative Rich List". FT.com. 2006-09-22. Retrieved 2007-11-08. 
  36. ^ "Superyacht Archimedes". SuperYachtFan. 

External links[edit]