Renaissance Technologies founder Jim Simons has named his son co-chairman of the quantitative hedge fund’s board and added five new directors, as he steps up preparations to hand over the secretive $75bn manager to the next generation.
The move positions Nathaniel Simons — who runs hedge fund Meritage Group and has been vice-chair of Renaissance since 2006 — to take over from his father as chairman. The younger Mr Simons spent 13 years at the firm as a principal before leaving to pursue climate change-related projects.
Four of the new directors are senior Renaissance executives, and the fifth spot has gone to Mr Simons’ son-in-law Mark Heising, according to a regulatory filing.
Mr Simons’ decade-long succession planning has so far been hailed as a success in an industry where ageing founders have often struggled to pass the torch to a younger generation. Bridgewater’s Ray Dalio, for example, has faced a rotating cast of co-chief executives over the past decade, before finally handing the job at the global macro fund to former Treasury official David McCormick last year.
Mr Simons, 82, first stepped back from the day-to-day management of Renaissance and passed over the reins to his two lieutenants, Peter Brown and Robert Mercer, in 2010. Mr Mercer left the role in 2017 after controversy around his backing of president Donald Trump and media outlet Breitbart News. This brought unwelcome attention to the publicity-shy hedge fund, and Mr Brown is now sole chief executive.
“It’s been resolved and I think everything is under control,” Mr Simons told the FT last year. “It was to some extent an internal issue, but it’s been resolved . . . The clients — maybe some complained — but we’ve had no problem with our investors at all.”
Renaissance remains one of the hedge fund industry’s most-respected names, because of its enviable record. Last year Mr Simons said that Renaissance had delivered an annual average return of about 40 per cent since 1988 — even after charging employees a hefty fee for keeping their money in the hedge fund.
In a sector hardly known for its transparency, the firm is resolutely secretive. It was one of the pioneers of computer-driven investing, using algorithms to systematically scour financial markets for profitable patterns it can mine.
Renaissance’s flagship hedge fund Medallion was so successful that it ejected outside investors in 2005, and now just manages the money of the firm’s own employees.
“How does Medallion do it? If I told you how then everyone would do it and it wouldn’t be good any more,” Mr Simons said in the 2019 interview.
The success of Renaissance has helped Mr Simons accumulate a fortune that Forbes estimates at $21.6bn — making him wealthier than media mogul Rupert Murdoch, and fellow financial tycoons Mr Dalio and Blackstone’s Stephen Schwarzman.
Mr Simons was a geometer who first worked as a Soviet code-cracker at the Institute for Defense Analyses until he was ejected for opposing the Vietnam war. He then headed the mathematics programme at Long Island’s Stony Brook University, before founding Renaissance in 1982. These days he primarily focuses on philanthropic endeavours, such as founding Maths for America and Quanta, a scientific magazine.