Quant Trailblazer Jim Simons Dies at 86 | Chief Investment Officer

Jim Simons

Jim Simons, who worked to crack Soviet codes during the Cold War, earned fame and fortune turning his math prowess to investments. Simons died Friday at 86, and leaves behind a towering legacy as one of the pioneers of computer-based quantitative investing.

He died in New York City and no cause of death was listed, according to his charitable organization, the Simons Foundation, which has given billions to philanthropic causes, particularly those supporting math, science research and education. He was known to be in poor health recently.

His methods helped inspire today’s welter of quant-oriented hedge funds, which many institutional investors have added to their portfolios over the last several decades.

Simons was worth $31.8 billion, making him the world’s 49th-wealthiest person, as listed on the Bloomberg Billionaires Index. In 1982, Simons founded quant trading house Renaissance Technologies (estimated assets now: $106 billion). RenTech, as it is known, does such things as assess the statistical probability of how far securities will move in a given market.

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In 1988, Simons launched the firm’s flagship hedge fund, Medallion, which since inception has racked up a reported average net return of 39% annually. He feared Medallion would grow too large to be an effective investing platform, so he stopped accepting new money from clients in 1993. Then in 2005, he cashed out all outside investors, allowing only RenTech employees to invest.

He relinquished the RenTech CEO title in 2010 and stepped down as chairman in 2021. Simons turned over leadership of the company to two long-time staffers, fellow math whizzes Peter Brown and Robert Mercer.

Showing his math brilliance as a child, Simons went on to earn degrees from the Massachusetts Institute of Technology and the University of California, Berkeley. He worked at the Institute for Defense Analyses, a federally funded nonprofit, breaking Russian codes. But owing to his criticism of the Vietnam War, he ran afoul of the organization’s chief, General Maxwell Taylor, and got fired.

After a stint as head of the math department at Stony Brook University, Simons turned to Wall Street, where he used algorithms to trade commodities. From there, he founded RenTech, where instead of hiring finance experts, he preferred fellow mathematicians, as well as physicists and even astronomers.

“Hire the smartest people you possibly can,” Simons said at a talk he gave at MIT in 2019. “Work collaboratively, and let everyone know what everyone else is researching, so people aren’t wasting their time.”

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Tags: algorithms, Hedge Funds, James Simons, Medallion Financial Corp., MIT, quant trading, Renaissance Technologies

The Canada Pension Plan Investment Board and Global Infrastructure Partners have entered into a deal to acquire Minnesota-based utility and energy provider Allete for $6.2 billion, the firms have announced.

The partnership will take the energy company private for $67.00 share, a 19.1% premium to its share price on December 4, 2024, when a media report announced that the company was exploring a sale.

Both CPPIB and GIP have a long history of acquiring stakes in utilities. CPPIB owns stakes in or fully owns more than a dozen utilities and energy providers in its real assets portfolio, including Maple Power, Civitas Resources, Aera Energy Services and Wolf Midstream.

Allete canceled its May 9, 2024, earnings conference call following the announcement of its acquisition on May 6.

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“Allete is at the forefront of the clean energy transition, and we are thrilled to support the delivery of the company’s ‘Sustainability-in-Action’ strategy, which we believe will generate substantial value both for Allete’s customers and CPP contributors and beneficiaries,” said James Bryce, managing director and global head of infrastructure at CPPIB.

Allete and its subsidiaries provide electricity to over 145,000 residents in the upper Midwest. Business units within Allete include;

Allete Clean Energy-which develops, acquires and manages clean and renewable energy projects;
BNI Energy-an operator of coal mines and generating stations;
Minnesota Power – which provides 50% renewable power to over 145,000 residents in Northern Minnesota;
New Energy Equity-a solar development company with more than 250 projects across 25 states; and;
Superior Water, Light & Power-an electricity, water and natural gas provider based in Wisconsin.

The deal is anticipated to close in mid-2025, pending regulatory approval and other closing conditions.

“GIP, alongside CPP Investments, look forward to partnering to provide Allete with additional capital so they can continue to decarbonize their business to benefit the customers and communities they serve,” said Bayo Ogunlesi, chairman and CEO of GIP, in a press release. “Bringing together Allete, with its demonstrated commitment to clean energy, with GIP, one of the world’s premier developers of renewable power, furthers our commitment to serve growing market needs for affordable, carbon-free and more secure sources of energy.”

CPPIB manages investments for 22 million beneficiaries in Canada. As of December 31, 2023, the fund had C$590.8 billion ($432.01 billion) in assets. Global Infrastructure Partners is one of the world’s largest infrastructure investors, with $112 billion in assets under management.