Jim Simons, the Cold War code-breaker who built the world's greatest moneymaking machine

Jim Simons, the man who many investors believe built the world’s greatest moneymaking machine at his secretive firm, Renaissance Technologies, has died. 
He was 86. 

A one-time code breaker for the US government, Simons never shared the secret of how he made more than four times the return of the S&P 500 Index in his most famous fund, Medallion. From 1988 through 2023, the fund got him an average annual return of almost 40%, even after hefty fees, turning Simons and three of his colleagues into billionaires. 

The Quant King

Simon moved from academia to investing in his 40s, eschewing standard practices of money managers in favor of quantitative analysis, finding patterns in data that predicted price changes. His success earned him the sobriquet -- Quant King.

At Renaissance, located in East Setauket, New York, Simons avoided employing Wall Street veterans. Instead he sought out mathematicians and scientists, including astrophysicists and code breakers, who helped him gather usable investment information in the terabytes of data his firm sucked in each day on everything from sunspots to overseas weather. 

“There are just a few individuals who have truly changed how we view the markets,” Theodore Aronson, founder of AJO Vista, a quantitative money management firm, told Bloomberg Markets magazine in 2008. “John Maynard Keynes is one of the few. Warren Buffett is one of the few. So is Jim Simons.”

He was worth an estimated $31.8 billion, making him the 49th-richest person in the world, according to the Bloomberg Billionaires Index.

Math wizard

Born on April 25, 1938, in the Boston suburb of Brookline, Simons was the only child of Matthew Simons and Marcia Kantor. His father worked in the film industry as a New England sales representative for 20th Century Fox. Later he helped manage his father-in-law’s shoe factory.

Precocious at math from age 3, Simons completed Newton High School in three years. At MIT, he earned a bachelor’s degree in mathematics in 1958 after just three years of study. While pursuing his Ph.D. at the University of California at Berkeley, he got his first taste of investing, driving to a Merrill Lynch brokerage in San Francisco to trade soybean futures. 

Cold War code-breaker

In 1964, after teaching at Harvard University, Simons moved to Princeton, New Jersey, to take a high-paying and highly classified job at the Institute for Defense Analyses. The nonprofit research organization was hiring mathematicians to support the US National Security Agency in cracking codes and ciphers used by the Soviet Union.