Renaissance hedge fund: Only scientists need apply

By Dane Hamilton

NEW YORK, May 22 (Reuters) - Wall Street traders and analysts take note: don't bother applying to work at Renaissance Technologies Corp., the $30 billion hedge fund manager whose assets could reach $100 billion in coming years.

The top-performing firm only hires scientists to develop its trading strategies, all of which are executed entirely by computers, its founder and president Jim Simons told an industry audience in New York this week.

"We hire physicists, mathematicians, astronomers and computer scientists and they typically know nothing about finance," Simons said in a keynote address at the International Association of Financial Engineers annual conference. "We haven't hired out of Wall Street at all."

Simons' talk before an audience of mostly quantitative traders, analysts and others shed a little light on the secretive world of Renaissance, whose returns are renown on Wall Street but whose trading strategies are often described as "black box."

Renaissance is far from typical in the fast-growing, $1.5 trillion hedge fund industry, which is largely populated by finance pros with a Wall Street or City of London pedigree. The firm operates from a 50-acre campus near Stony Brook University in Long Island, New York, where the 69-year-old Simons chaired the math department prior to founding Renaissance in 1989.

And Simons, who previously taught math at Massachusetts Institute of Technology and Harvard, sticks closely to his academic and scientific roots, having imprinted a strict academic rigor at the firm, where some 270 are employed.

The firm's scientists tap decades of diverse data in Renaissance's vast computer banks to assess statistical probabilities for the direction of securities prices in any given market. Experts attribute a breadth of data and the firm's ability to manipulate it for its consistent success in beating the markets.

Simons' first hedge fund open to outside investors, the now-$6 billion Medallion Fund, for instance, generated annualized returns of over 33 percent over 15 years to 2004, according to marketing materials obtained by Reuters.