Jim Simons is the richest hedge fund manager in the world, a title he has held for four consecutive years.
He has a net worth of $28 billion, which places him at number 28 on the 2021 Forbes 400 billionaires list.
Simons, who holds a PhD in mathematics from the University of California, Berkeley, founded the quantitative trading firm Renaissance Technologies in 1982.
Renaissance Technologies’ hedge funds trade in markets around the world using mathematical models to analyse and execute trades.
The firm uses computer-based models to predict price changes in financial instruments. They analyse as much data as can be gathered and look for non-random movements to make predictions.
Medallion, the main fund closed to outside investors, has earned over $100 billion in trading profits since its inception in 1988.
It translates to a 66.1% average gross annual return or a 39.1% average net annual return between 1988 and 2018.
Simons officially retired in 2010 but remained at Renaissance as non-executive chairman.
Renaissance Technologies’ share portfolio
Renaissance Technologies’ latest 13F SEC filing revealed that it manages over $80 billion in assets.
The Medallion Fund manages $10 billion in assets using a black-box strategy that is only known to Renaissance owners and employees.
Renaissance Technologies is highly diversified, with four times as many holdings as the “king of diversification”, Ray Dalio from Bridgewater Associates.
It has 4,173 holdings, the smallest of which is Allena Pharmaceutical, amounting to only $3,000.
It is difficult to understand how Renaissance manages the administrative burden of so many holdings or why it does not make use of bigger ETF holdings for its diversification.
Algorithms must make a large percentage of share acquisition and disposal decisions.
Shares with an individual portfolio weight smaller than 0.1% each make up nearly 40% of the entire portfolio. The top 60 holdings of the company barely make up a third of the portfolio.
The firm sold its entire stake in Google, Pfizer, Qualcomm, Starbucks, Amazon, and Comcast in the second quarter. It also cut its stake in Tesla in half.
It started new positions in Disney, Applied Materials, Goldman Sachs, Citigroup, Best Buy, Intuit, Nike, Mercado Libre, Shopify, and Block (Square).
As far as Renaissance’s top 10 holdings are concerned, it started a new position in Microsoft, which already makes up its second-biggest holding, and increased its holding in Chevron six-fold.
It trimmed its holdings in Novo-Nordisk, Gilead, Zoom, and VeriSign, while slightly adding to its other top 10 positions.
Below is a list of Renaissance Technologies’ top holdings as of 30 June 2022:
|Name||Value ($ Million)||Portfolio Weight|
|Monster Beverage Corp||$524||0.6%|
|AMD – Advanced Micro Devices||$407||0.5%|
|Cboe Global Markets||$266||0.3%|
|Total for top 59 holdings||$28,621||33.9%|
|173 other holdings with a portfolio weight of 0.1% – 0.3% each||23,869||28.3%|
|3941 other holdings with a portfolio weight less than 0.1% each||31,977||37.9%|