RenTec's Jim Simons Retiring At End Of Year ~ market folly

Thursday, October 8, 2009

RenTec's Jim Simons Retiring At End Of Year

If you haven't already heard, Jim Simons, founder and CEO of legendary quant hedge fund Renaissance Technologies, will be stepping down at the end of the year to retire. Dealbreaker reported earlier that current co-presidents Robert Mercer and Peter Brown will assume the role of co-CEO's at the start of the new year. They also report that Simons will stay on as a non-executive chairman and will "keep sizable investments in RIEF and RIFF."

His actions will undoubtedly unleash a wave of speculation as to "why". But we ask, can't a guy just retire because he's ready to? Nonetheless, questions will be raised as to whether he has lost his passion for 'the game' or whether the poor performance of RIEF this past year has frustrated him (head here for explanation on their performance woes - the fund was down almost 9.5% through September). Back in August, we revealed that RenTec landed on a list of best & worst performers for 2009. And unfortunately for them, they weren't on the 'best' list. It will certainly be interesting to see if Simons' departure leads to redemption requests from investors. While the fund is obviously not just one man, the exit of the man in charge could potentially leave some investors wary.

Jim Simons is quite the accomplished fellow as his returns from his hedge fund's Medallion fund have been astonishing over the years. They have landed him on the list of the top 25 highest paid hedge fund managers of 2008. Additionally, he has graced Forbes' billionaire list. Simons is a secretive man and as such resources on him are a bit scarce. However, we did manage to stumble upon a lengthier interview he has done in the past.

We'll definitely keep tabs on any potential aftershock experienced at RenTec following his departure.

*Update: Here's the letter, courtesy of Dealbook.

The Letter From Mr. Simons:

Oct. 8, 2009

Dear Renaissance Investor,

As many of you know, for the past several years I have gradually stepped back from day-to-day operations of Renaissance. Six years ago, Bob Mercer and Peter Brown became co-executive vice presidents, with all research and production reporting to them, and two years ago, they became co-presidents, assuming a broader set of responsibilities. The time has now come for me to take one further step back.

As of Jan. 1, 2010, Bob and Peter will become co-C.E.O.’s of Renaissance, with all areas of the firm reporting to them. I will remain the company’s principal shareholder and chair of the board. As such I will regularly attend monthly meetings of the executive committee and meetings of the board whenever scheduled, participating in all major corporate decisions. Consistent with best practices, Paul Broder, our chief risk officer, and Mark Silber, our chief financial officer, will report to the board on a dotted-line basis.

I am confident that this transition is best for the firm. I have led the organization and its predecessor for 31 years, and it is definitely time to pass the torch. We are very fortunate to have such able people as Bob and Peter to take the reins. Behind them and Paul and Mark is an outstanding cadre of senior management in all areas of the company, and behind them is a wonderful group of knowledgeable and hard-working individuals. Renaissance is a marvelous firm, dedicated to its investors and its employees. I have every expectation that under the new leadership this tradition will brilliantly carry on.


Jim Simons

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