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LI hedge fund tops profit list

Renaissance Technologies, founded by ex-Stony Brook professor James

Renaissance Technologies, founded by ex-Stony Brook professor James Simons, saw a 35 percent return for its Institutional Equities investors in 2011, according to an HSBC Private Bank analysis. (Oct. 26, 2010) Photo Credit: John Dunn

A private bank analysis says Renaissance Technologies, an East Setauket investment company, led the pack with the most profitable hedge fund for 2011, several published reports said Monday.

Founded by former Stony Brook University math professor James Simons, the firm’s Institutional Equities fund, a so-called quant (or quantitative) fund, generates investment choices through computer models.

The report was compiled by HSBC Private Bank.

“Head of the table is Jim Simons’ Renaissance Institutional Equities, which gave investors a return of 34.66 percent, after a bad run through 2009 and 2010,” the Investment Europe website said. The website gave no further details, saying, “the report is not published and is for private circulation among clients of HSBC Private Banking only.”

However, at least partial confirmation came last month from the Reuters news agency, which said it had seen HSBC’s numbers as of Dec. 9, at which time “the Renaissance Institutional equities fund had advanced 32 percent.”

Overall, most hedge funds suffered in 2011, the Investment Europe website said, with many respected firms deep in the red by more than 20 percent.

Simons has retired but remains active at the hedge fund and at a private foundation he created, The Simons Foundation, which last month donated $150 million to Stony Brook University in addition to a separate donation, in 2008, of $60 million.

Although he says he retired in 2010 after 30 years as chief executive of the hedge fund, Simons remained as nonexecutive chairman and was one of the world's top-earning hedge fund officers that year, making $2.5 billion. That made him the third-highest income that year among hedge fund chiefs.

Simons' investment strategies were driven by mathematics. He was once chairman of the math department at Stony Brook University. He earned a bachelor of science in math from the Massachusetts Institute of Technology and a doctorate in math from the University of California, Berkeley.

The son of a shoe factory owner in Massachusetts, Simons began trading commodities in the 1960s with Harvard math wiz Charles Freifeld. They tripled their investments, and the experience led Simons to rely on market returns based on mathematical analysis.

Photo: James Simons addresses a gathering at the new Simons Center for Geometry and Physics at Stony Brook University.  (Oct. 26, 2010)

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