Discover your dream Career
For Recruiters

Morning Coffee: The heartbreak of an exceptional man in finance. Job cuts are still coming

How did Jim Simons, founder of quant fund Renaissance Technologies, make his money? He didn't even start working in finance until his 40s and by the time he died aged 86 last Friday, he was worth nearly $32bn. Even now, after Simons practised his art for decades, there's still confusion as to how, exactly, Renaissance Technologies' Medallion Fund came to be quite so profitable.

Get Morning Coffee  in your inbox. Sign up here.

A post from Cliff Asness, the sometimes crotchety co-founder of AQR Capital Management explains the mystery. "To state the obvious, if we (or I) had a deep knowledge of how Medallion did it we’d do it too!", says Asness. "They figured out an amazing way to take out a few billion dollars a year from markets with very low (not zero) risk." Asness thinks this likely had something to do with them being "quite early to things like stat arb, HFT, factor investing, natural language processing of financial news." He says they were "particularly good at optimally trading very high frequency signals and slower ones (a non-trivial trade-off) together."

Simons used this probable medley of tools and techniques to generate an annual return of 40% on the $10bn Medallion Fund between 1988 and 2023, making he and all who worked with him very rich. In the process, Simons maintained his humanity and his liking for tobacco. “Professionally, Jim was a mathematician and a businessman. Spiritually, he was a visionary. Personally, he was a mensch who cared deeply for individuals and for humanity,” wrote Peter Brown, one of his first RenTech hires to employees last week. The Wall Street Journal notes that company lore has Simons buying insurance for a restaurant on a skiing holiday so that he could smoke inside. 

And yet, Simons' life wasn't without its tragedies. Two of his five children died. Paul was killed aged 34 in a bike accident on Long Island. Nick died aged 23 while practicing free-diving in Bali. Linda Kreitzman, a lecturer at Berkeley's Masters in Financial Engineering, says Simons was a "giant soul" who tried to turn his grief to good. "Once he offered to speak to one of my students when I told him that his entire family had perished in the fires in Greece in 2018. Jim himself experienced the death of his two children, and he wanted to talk to my student about how he himself was coping with the tremendous loss he suffered. He wanted to help...."

Separately, even as deals return to markets like the UK, banking jobs are still being cut. We noted a few weeks ago that Barclays was cutting its ESG banking team more than others, and now Bloomberg has noted something similar: six energy transition and two sustainable banking team jobs have been removed. Elsewhere, Bank of Montreal is trimming a few heads in New York in pursuit of "positive operating leverage." 

“You’re definitely seeing appetite pick up but we’re still a long way off peak M&A activity,”Alisdair Gayne, head of UK investment banking at Barclays told the Financial Times. 

Meanwhile...

Jim Simons and his wife gave billions of dollars to hundreds of philanthropic causes. His foundation has led to breakthroughs in our understanding of autism, the origins of the universe, cellular biology and computational science. (Simons Foundation) 

‘I did a lot of math, I made a lot of money, and I gave almost all of it away.’ (Financial Times) 

Bank of America will pay for staff to attend Leo Lukenas' funeral. (The Times) 

Citadel Securities' Chief Executive Officer Peng Zhao said the market maker is running at “record pace” and that “This year both the first quarter and the year to date are at historical highs.” (Bloomberg)  

Revenues from trading desks at Goldman Sachs, JPMorgan Chase and Morgan Stanley, three giant banks, leapt by around 40% between 2019 and 2020—and have remained at or above that level since. High revenues are starting to look like a new normal. (Economist) 

A dozen things I've learned from Jim Simons. (25Iq)

Jerome Saragoussi, head of macro research and strategy at Schonfeld Strategic Partners, is expected to join Bridgewater in June. He's following macro trader Ben Melkman there. (Business Insider) 

Generation Z are beating seasoned fund managers. In the first quarter of 2024, the Investment Association Mixed Investment 40-85% sector — a reasonable benchmark with retail investors given its mixture of bonds, equities and cash — rose 4.2%. The average portfolio held by 18- to 24-year-olds at Interactive Investor, one of the UK’s retail investment platforms, rose 5.1%. (Bloomberg) 

Morgan Stanley wants to hire another 100 people in Paris. (Bloomberg) 

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

author-card-avatar
AUTHORSarah Butcher Global Editor

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.

Boost your career

Find thousands of job opportunities by signing up to eFinancialCareers today.
Recommended Articles
Recommended Jobs
Metis Search
Analyst - Private Equity Placement
Metis Search
London, United Kingdom
Hunter Bond
Finance Management Reporting VP
Hunter Bond
London, United Kingdom
Man Group plc
Portfolio Manager (Macro)
Man Group plc
London, United Kingdom

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.