Jim Simons, founder of Renaissance Medallion Fund is arguably the world´s greatest investor. There is a book coming out this week called “the man who solved the market” which sparked my interest and will be looking to read it when it comes out.
What is interesting to me is the entrepreneurial journey that Jim Simons has gone through in his path to the top of the investing world.
· Jim started the fund when he was 40 yrs old, having never started a business nor been an investor in the past
· He was an academic, a math teacher looking to apply predictive models to the market in order to make money. He was also a code cracker for the NSA.
· Went through three different partners / founders until he was left alone as the solo director of the company
· Did not have experience hiring people but was qualified in recognizing scientific talent to bring onto the team
· Big vision that with automation and mathematical models, the market could be beat
· When you see him speak, he is not particularly the personification of a charismatic CEO
The story is amazing as the fund currently manages 110bn+ usd, now with no outside investors but the employees and charged the highest fees in the business (5% management / 44% performance).
This can only be achieved with incredible performance:
Buffett´s Berkshire reported last week a cash balance of 128bn usd at the company so he is not doing so bad ;)
Jim mentions that the key to his success was having the capability to analyze lots of data and hiring smart people. Seems pretty simple!
Renaissance is the example of a machine learning approach with a combination of human design that has outperformed the traditional fund management industry for a long period of time. I believe the growing strength in ML and AI – directed by top talent will produce new winners across all industries in years to come.
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