In the summer of 2000, I was a reporter for Institutional Investor covering hedge funds and other parts of the financial world. But I never heard of Jim Simons when a source suggested I write about the hedge fund manager.
Still, a secretive firm in a small Long Island town, with supposedly enormous returns, run by a former mathematician, was obviously intriguing. I called Simons and asked for an interview at his East Setauket headquarters. A Renaissance Technologies executive called me back and said Simons “respectfully” declined. Nevertheless, I decided to go ahead with the reporting and hoped that Simons would eventually relent. I had time. II features were often longer than 5,000 words and they took a while to investigate and write.
Simons had been written up in the annual Wall Street rich list published by the now defunct Financial World magazine, but he was virtually unknown in financial circles. Even most of the quantitative-oriented analysts and investors I called said they had never heard of Renaissance.
Those who were involved with Renaissance unfortunately knew better than to speak. I called around Bear Stearns, the firm’s leading prime broker, and got a lot of hang-ups. Simons had been the head of the math department at Stony Brook University, and Renaissance had close ties to the school. Stony Brook was initially enthusiastic about setting up an interview with the school’s president, but then I guess they checked with Simons. I left a voice mail with the mathematics journal that published Simons’ signature Chern-Simons paper, seeking a reprint, but never heard back.
Nevertheless, I started to make some progress. An early investor generally confirmed Renaissance’s sky-high returns in its flagship Medallion Fund; D.E. Shaw founder David Shaw told me that Simons was a “first-rate scholar” and close to being unique in the asset management world; a neighbor told me about a day spent on one of Simons’ boats that had a state-of-the-art stabilization system built into a vintage vessel. Simons seemed ever more fascinating.
After being “respectfully” declined several more times, we told Renaissance that we were publishing the story anyway in October. II sent an experienced photographer to East Setauket to shoot the headquarters from someplace off its property. He came back and said it was virtually impossible to get an angle into the building. I’m sure Simons would have said this was an example of luck, not design, but by now our imaginations were running a bit wild. In any case, we continued to work on closing the story.
And then, out of the blue, three days before the magazine went to press, Renaissance called and said I could drive out the next day with Simons and spend a day at the firm. I don’t know what triggered the change-of-heart.
The first half hour of the drive confirmed Simons’ now famous chain-smoking habit, but otherwise it was a bit awkward. I made the mistake of telling him the names of former scientists who I knew worked at the firm. He flipped out a bit about revealing the identities of his staff in the article, and I thought he might have his driver turn the car around. Eventually, I agreed to use some but not all names.
We arrived at Renaissance and a staff member gave me a tour. The relatively plush offices confirmed that the firm was clearly making a lot of money. My tour guide showed me the firm’s auditorium; he said Renaissance regularly held talks by outside scientists, in areas such as cancer research, in the belief that this might spark useful insights into statistical approaches. I had never seen a lecture room at a hedge fund. If I had not seen it with my own eyes, I’m not sure I would have had the confidence or nerve to put it into an article.
I then spent an hour with Simons in his office. I began to see the man who has been so fondly remembered in recent days. Witty and down-to-earth, he was actually very open about the basic structure of the firm and its operating principles. In terms of the details of the trading strategies though, he deflected all questions. He did try to keep me from writing anything really stupid. I noticed he had a book about Karl Marx on his coffee table. He rushed to explain that someone just happened to give it to him, and that it had nothing to do with the firm. I then met with dozens of people from the three operating groups within Renaissance: researchers, traders, and computer and systems specialists. Renaissance had no public relations people or press experience. There were no ground rules and no one was supervising the conversations. That wouldn’t happen today.
It was time to drive back to New York City with Simons and his son Nat. Simons asked me if I wanted a gin and tonic for the trip back. Another first in my journalism career. During the drive, I asked him to explain Chern-Simons theory to me; at some point he gave up.
The story was published, and I had some copies delivered to Simons. The article included the line: “A chain smoker in defiance of statistical possibilities…” Several days later I got a package delivery from Simons. It was a poster for a mathematics conference in his honor; there was a photo of Simons with a cigarette dangling from the corner of his mouth and clouds of smoke above his head.
Very often when you write an extremely positive story, you will get a call from someone who feels the need to convey that you’re an idiot who got suckered. In the case of the Renaissance story, one of Simons’ relatives got in touch and said what the story missed was how nice and generous he was to his extended family. You don’t get too many of those calls.
Six months after publication, a copy of the Chern-Simons article arrived in the mail from the mathematics journal. There was no apology or even acknowledgement that six months was sort of a long time to wait. Perhaps it is not a long time in the world of academic journals. It was maybe a final reminder of the different worlds Jim Simons had bridged.
Hal Lux spent fifteen years as a financial journalist, for much of that time as a Senior Writer at Institutional Investor. He subsequently spent twenty years working for a multi-strategy hedge fund. He is currently a writer based in New York City.
