Renaissance Technologies

James Simons founded Renaissance Technologies following a decade as the Chair of the Department of Mathematics at Stony Brook University. Simons in 1976 was a recipient of the Oswald Veblen Prize of the American Mathematical Society. He is known in the scientific community for co-developing the Chern–Simons theory, which is used in modern theoretical physics. ==Quantitative trading==

The firm uses quantitative trading, where staff tap data in its petabyte-scale data warehouse to assess statistical probabilities for the direction of securities prices in any given market. Staff attribute the breadth of data on events peripheral to financial and economic phenomena that Renaissance takes into account, and the firm's ability to manipulate large amounts of data by deploying scalable technological architectures for computation and execution. Renaissance Technologies' hedge fund has employed mathematical models to analyze and execute trades, many of them automated. The firm uses computer-based models to predict price changes in easily traded financial instruments. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions. Some also attribute the firm's performance to employing financial signal processing techniques such as pattern recognition. The book The Quants describes the hiring of speech recognition experts, many from IBM, including the current leaders of the firm. =="Quants" with non-financial background==

Renaissance employs specialists with non-financial backgrounds, including computer scientists, mathematicians, physicists, signal processing experts and statisticians. The firm's latest fund is the Renaissance Institutional Equities Fund (RIEF). RIEF has historically trailed the firm's better-known Medallion fund, a separate fund that contains only the personal money of the firm's executives. Renaissance is a firm run by and for scientists, employing those with non-financial backgrounds for quantitative finance research like mathematicians, statisticians, theoretical and experimental physicists, astronomers, and computer scientists. According to a piece in The New York Times, "Wall Street experience is frowned on and a flair for science is prized." Renaissance engages roughly 150 researchers and computer programmers, half of whom have PhDs in scientific disciplines, at its 50-acre East Setauket campus in Long Island, New York, which is near the State University of New York at Stony Brook. Mathematician Isadore Singer referred to Renaissance's East Setauket office as the best physics and mathematics department in the world. The firm's administrative and back-office functions are handled from its Manhattan office in New York City. The firm is secretive about the workings of its business and very little is known about them. The firm is known for low personnel turnover and for requiring its researchers to agree to intellectual property obligations by signing non-compete and non-disclosure agreements. == Monemetrics ==

In 1978, Simons left academia and started a hedge fund management firm called Monemetrics in a Long Island strip mall. The firm primarily traded currencies at the start. It did not occur to Simons at first to apply mathematics to his business, but he gradually realized that it should be possible to make mathematical models of the data he was collecting. The Medallion fund is considered to be one of the most successful hedge funds ever. From 1994 through mid-2014, it averaged a 71.8% annual return, before fees. The fund has been closed to outside investors since 1993 and is available only to current and past employees and their families. The firm bought out the last investor in the Medallion fund in 2005 and the investor community has not seen its returns since then. About 100 of Renaissance's some 275 employees are "qualified purchasers", meaning they generally have at least $5 million in assets to invest. The remaining are "accredited investors", generally worth at least $1 million. Simons ran Renaissance until his retirement in late 2009. During 2020 the Medallion fund surged 76%. Medallion as a retirement fund Renaissance Technologies terminated its 401(k) retirement plan in 2010 and employees' account balances were put into Individual Retirement Accounts. By 2012, Renaissance was granted a special exemption by the United States Labor Department allowing employees to invest their retirement money in Medallion arguing that Medallion had consistently outperformed their old 401(k) plan. In 2013, Renaissance's IRA plans had 259 participants whose $86.6 million contribution grew to $153 million that year without fees or annual taxes. Renaissance also offers two Renaissance Institutional Diversified Alpha (RIDA) to outsiders. RIEF once again struggled in the high volatility environment of 2020. According to an article in Bloomberg in November 2020, From December 1, 2020 to February 1, 2021, according to Bloomberg, clients (LPs) had withdrawn $5 billion from the fund. On 25 September 2008, Renaissance wrote a comment letter to the Securities and Exchange Commission, discouraging them from implementing a rule change that would have permitted the public to access information regarding institutional investors' short positions, as they can currently do with long positions. The company cited a number of reasons for this, including the fact that "institutional investors may alter their trading activity to avoid public disclosure". ==Governmental affairs==

2014 tax avoidance investigation In July 2014, Renaissance Technologies was included in a larger investigation undertaken by Carl Levin and the Permanent Subcommittee on Investigations on tax evasion by wealthy individuals. Campaign contributions According to OpenSecrets, Renaissance was the top financial firm contributing to federal campaigns in the 2016 election cycle, donating $33,108,000 by July. By comparison, over that same period sixth ranked Soros Fund Management has contributed $13,238,551. They were top donors to the presidential campaigns of Hillary Clinton and Donald Trump. During the 2016 campaign cycle, Simons contributed $26,277,450, ranking as the 5th-largest individual contributor. Simons directed all but $25,000 of his funds towards liberal candidates. Robert Mercer contributed $25,059,300, ranking as the 7th-largest individual contributor. Robert Mercer directed all funds contributed towards conservative candidates. Between 1990 and 2016, Renaissance employees have contributed $59,081,152 to federal campaigns and since 2001 have spent $3,730,000 on lobbying. ==See also==