Peter Fitzhugh Brown

Last updated

Peter Fitzhugh Brown (born February 2, 1955) is the CEO of the American hedge fund Renaissance Technologies. [1]

Contents

Personal life and education

Brown is a son of Henry B. R. Brown, who invented the world's first money market fund, the Reserve Fund. [2] Brown's great-grandfather was United States federal judge Addison Brown, who was also a botanist and a founder of the New York Botanical Garden. He is also a descendent of Virginia statesman Richard Henry Lee, whose June 1776 resolution led to the United States Declaration of Independence. [3]

Brown graduated from Harvard University with a B.A. in mathematics. He later earned a Ph.D. in computer science from Carnegie Mellon University under Geoffrey Hinton. [4] He married Margaret Hamburg on May 23, 1992, who would later serve as the head of the FDA under the Obama Administration. [5] Together they have two children. [6] Their family foundation, Quetzal Trust, has over $380 million in assets as of 2020. [7] [8]

Career

After graduating from Harvard, Brown joined a team at Exxon Office Systems that was working on computer systems to transcribe spoken language into computer text. [9] In 1984 he joined the IBM speech group, working on computer software to transcribe spoken text. The group, led by Frederick Jelinek, included Robert Mercer and several other mathematicians, statisticians, and scientists. [9] [10]

To them, language could be modeled like a game of chance. At any point in a sentence, there exists a certain probability of what might come next, which can be estimated based on past, common usage. ... each step along the way is random, yet dependent on the previous step—a hidden Markov model. A speech-recognition system's job was to take a set of observed sounds, crunch the probabilities, and make the best possible guess about the "hidden" sequences of words that could have generated these sounds. To do that, the IBM researchers employed the Baum-Welch algorithm—codeveloped by Jim Simons's early trading partner Lenny Baum—to zero in on the various language probabilities. Rather than manually programming in static knowledge about how the language worked, they created a program that learned from data. [11]

Brown was the lead author in the IBM alignment models. [12] They demonstrated a spellchecker to the IBM management using a statistical system similar to the IBM alignment models. [13] Brown unsuccessfully urged IBM management to use the speech group's research to develop and sell new products, such as an automated service for evaluation of financial credit. [14] He successfully convinced Abe Peled, a high-level executive in IBM's Research Division, to hire the Carnegie Mellon research team that was programming a computer to play chess. The team, working for IBM, developed Deep Blue, which defeated Garry Kasparov in a 1997 chess match. [15]

Around 1993, he suggested to IBM that the statistical method could be applied to finance, such as managing the $28 billion pension fund of IBM, but the suggestion was not taken up. [13] [16] Jim Simons offered to double Peter Brown's and Robert Mercer's IBM salaries, so they went to work for Renaissance Technologies in 1993. [17] Brown and Mercer were responsible for hiring David Magerman in 1995. [18] In 1995 Brown and Mercer implemented a new, improved trading system that incorporated all of the trading signals and portfolio requirements of Renaissance Technologies into a monolithic, new, and improved trading system. Soon afterward, they were promoted to senior managers and partners with percentages of the profits of Renaissance Technologies. [19] Magerman found and fixed two serious software bugs in Brown and Mercer's trading system. [20] In 1997 Simons gave a 10% equity stake to Henry Laufer and, later, gave sizable equity stakes to Brown, Mercer, and others. Simons thus reduced his equity stake to very slightly over 50%. [21] As Jim Simons became more confident, he moved the firm into a new headquarters compound with a gym, lighted tennis courts, a library with a fireplace, and a large auditorium, where biweekly seminars were held. [22]

Intense and energetic, Brown hustled from meeting to meeting, riding a unicycle through the halls and almost running over colleagues. Brown worked much of the night on a computer near the Murphy bed in his office, grabbing a nap when he tired. [23]

In 2003 Simons announced that Brown and Mercer would become executive vice-presidents of the entire firm, co-managing with Simons himself. [24] In 2010 Simons made Brown and Mercer co-CEOS and retired. [25] In November 2017, Mercer announced that he would resign from Renaissance Technologies. [26] Since Mercer's resignation, Brown has been the sole CEO. [1]

White's Ferry controversy

Brown and his sisters, Elizabeth Devlin and Harriet Dickerson, own Rockland Farm LLC in Loudoun County, Virginia, which has been in the Rust/Brown family for over 200 years. [3]

A narrow portion of the property along the Potomac River has long been used as the Virginia-side landing of White's Ferry, an important commuting link between Loudoun County and Montgomery County in Maryland. [27] [28] After unauthorized expansion of the landing including a concrete retaining wall was built on the property by the operators of White's Ferry following damage from a flood, Rockland Farm LLC sued, stating the 1952 license had been violated. Rockland Farm LLC won its case in November 2020 and White's Ferry ceased operations following a flood that snapped the cable used by the ferry to cross the river and failed negotiations to keep service operating. [29] [30]

In 2022, it was reported that negotiations to reopen the ferry were continuing with the new owners of the ferry service. [30] Rockland Farm LLC has offered to purchase the Maryland landing for more than the owner paid for it to get the ferry re-opened. It has also asked to be paid an inflation-adjusted per car fee of 50 cents as well as offering to go to last-best-offer binding arbitration; however, the current owners have rejected all offers. In turn, Rockland Farm LLC has rejected all proposals to sell the Virginia landing to the owners of the ferry. [31]

Related Research Articles

<span class="mw-page-title-main">Thomas J. Watson</span> American businessman (1874–1956)

Thomas John Watson Sr. was an American businessman who was the chairman and CEO of IBM. He oversaw the company's growth into an international force from 1914 to 1956. Watson developed IBM's management style and corporate culture from John Henry Patterson's training at NCR. He turned the company into a highly effective selling organization, based largely on punched card tabulating machines.

<span class="mw-page-title-main">Loudoun County, Virginia</span> County in Virginia, United States

Loudoun County is in the northern part of the Commonwealth of Virginia in the United States. In 2020, the census returned a population of 420,959, making it Virginia's third-most populous county. The county seat is Leesburg. Loudoun County is part of the Washington–Arlington–Alexandria, DC–VA–MD–WV Metropolitan Statistical Area.

<span class="mw-page-title-main">AIM alliance</span> Business alliance

The AIM alliance, also known as the PowerPC alliance, was formed on October 2, 1991, between Apple, IBM, and Motorola. Its goal was to create an industry-wide open-standard computing platform based on the POWER instruction set architecture. It was intended to solve legacy problems, future-proof the industry, and compete with Microsoft's monopoly and the Wintel duopoly. The alliance yielded the launch of Taligent, Kaleida Labs, the PowerPC CPU family, the Common Hardware Reference Platform (CHRP) hardware platform standard, and Apple's Power Macintosh computer line.

<span class="mw-page-title-main">Leesburg, Virginia</span> Town in Virginia, United States

Leesburg is a town in and the county seat of Loudoun County, Virginia, United States. It is part of both the Northern Virginia region of the state and the Washington metropolitan area, including Washington, D.C., the nation's capital.

Peter Norton is an American programmer, software publisher, author, and philanthropist. He is best known for the computer programs and books that bear his name and portrait. Norton sold his software business to Symantec Corporation in 1990.

<span class="mw-page-title-main">IBM Research</span> IBMs research and development division

IBM Research is the research and development division for IBM, an American multinational information technology company headquartered in Armonk, New York, with operations in over 170 countries. IBM Research is the largest industrial research organization in the world and has twelve labs on six continents.

<span class="mw-page-title-main">Lou Gerstner</span> American businessman

Louis Vincent Gerstner Jr. is the Chairman of Gerstner Philanthropies, a family foundation that has invested over $300 million in Biomedical Research, Education, Environment and Helping Hands. He is considered an icon of American business, and is best known for his tenure as chairman of the board and chief executive officer of IBM from April 1993 until 2002, when he retired as CEO in March and chairman in December. He is largely credited with the turnaround of IBM and for reclaiming its reputation for technical leadership.

<span class="mw-page-title-main">Samuel J. Palmisano</span> American businessman (born 1951)

Samuel J. "Sam" Palmisano is a former president and the eighth chief executive officer of IBM until January 2012. He also served as chairman of the company until October 1, 2012.

Renaissance Technologies LLC, also known as RenTech or RenTec, is an American hedge fund based in East Setauket, New York, on Long Island, which specializes in systematic trading using quantitative models derived from mathematical and statistical analysis. Their signature Medallion fund is famed for the best record in investing history. Renaissance was founded in 1982 by James Simons, a mathematician who formerly worked as a code breaker during the Cold War.

<span class="mw-page-title-main">Thomas J. Watson Jr.</span> American businessman and diplomat (1914–1993)

Thomas John Watson Jr. was an American businessman, diplomat, Army Air Forces pilot, and philanthropist. The son of IBM Corporation founder Thomas J. Watson, he was the second IBM president (1952–71), the 11th national president of the Boy Scouts of America (1964–68), and the 16th United States Ambassador to the Soviet Union (1979–81). He received many honors during his lifetime, including being awarded the Presidential Medal of Freedom by Lyndon B. Johnson in 1964. Fortune called him "the greatest capitalist in history" and Time listed him as one of "100 most influential people of the 20th century".

<span class="mw-page-title-main">Jim Simons</span> American mathematician and billionaire (1938–2024)

James Harris Simons was an American hedge fund manager, investor, mathematician, and philanthropist. At the time of his death, Simons' net worth was estimated to be $31.4 billion, making him the 55th-richest person in the world. He was the founder of Renaissance Technologies, a quantitative hedge fund based in East Setauket, New York. He and his fund are known to be quantitative investors, using mathematical models and algorithms to make investment gains from market inefficiencies. Due to the long-term aggregate investment returns of Renaissance and its Medallion Fund, Simons was described as the "greatest investor on Wall Street", and more specifically "the most successful hedge fund manager of all time".

<span class="mw-page-title-main">White's Ferry</span> Ferry crossing the Potomac River

White's Ferry, originally Conrad's Ferry, is an inactive cable ferry service that carried cars, bicycles, and pedestrians across the Potomac River between Loudoun County, Virginia and Montgomery County, Maryland, and is the last one of its kind to cross the Potomac. The location offered fishing services and water recreation including canoeing. It transported between 600 and 800 customers daily until its operations were suspended indefinitely in 2020 due to a legal dispute over use of its Virginia landing.

<span class="mw-page-title-main">Aldie, Virginia</span> Unincorporated community in Virginia, United States

Aldie is an unincorporated community and census-designated place (CDP) located between Chantilly and Middleburg in Loudoun County, Virginia, United States. The historic village of Aldie is located on the John Mosby Highway in a gap between the Catoctin Mountains and Bull Run Mountains, through which the Little River flows. Aldie traditionally serves as the gateway to the Loudoun Valley and beyond.

<span class="mw-page-title-main">John Larry Kelly Jr.</span> American scientist (1923–1965)

John Larry Kelly Jr., was an American scientist who worked at Bell Labs. From a "system he'd developed to analyze information transmitted over networks," from Claude Shannon's earlier work on information theory, he is best known for his 1956 work in creating the Kelly criterion formula. With notable volatility in its sequence of outcomes, the Kelly criterion can be used to estimate what proportion of wealth to risk in a sequence of positive expected value bets to maximize the rate of return.

<span class="mw-page-title-main">Charles F. Mercer</span> American politician (1778–1858)

Charles Fenton Mercer was a nineteenth-century politician and lawyer from Loudoun County, Virginia who served in the U.S. House of Representatives and the Virginia General Assembly.

<span class="mw-page-title-main">Rockland (Leesburg, Virginia)</span> Historic house in Virginia, United States

Rockland is the home of Virginia's Rust family, near Leesburg, Virginia. The property housed slaves to work their farm. The property was acquired by General George Rust from the heirs of Colonel Burgess Ball in 1817. General Rust built the present brick residence about 1822, incorporating an older frame house as a rear service wing.

<span class="mw-page-title-main">IBM</span> American multinational technology corporation

International Business Machines Corporation, nicknamed Big Blue, is an American multinational technology company headquartered in Armonk, New York and present in over 175 countries. It is a publicly traded company and one of the 30 companies in the Dow Jones Industrial Average. IBM is the largest industrial research organization in the world, with 19 research facilities across a dozen countries, having held the record for most annual U.S. patents generated by a business for 29 consecutive years from 1993 to 2021.

Robert Leroy Mercer is an American hedge fund manager, computer scientist, and political donor. Mercer was an early artificial intelligence researcher and developer and is the former co-CEO of the hedge fund company Renaissance Technologies.

A new-collar worker is an individual who develops technical and soft skills needed to work in the contemporary technology industry through nontraditional education paths. The term was introduced by IBM CEO Ginni Rometty in late 2016 and refers to "middle-skill" occupations in technology, such as cybersecurity analysts, application developers and cloud computing specialists.

References

  1. 1 2 "Peter Brown". Simons Foundation. Archived from the original on 2023-06-17. Retrieved 2021-05-01.
  2. "Reserve's Bent May Be Charged by SEC Over Money Fund's Collapse - Bloomberg". Bloomberg News . 2012-11-03. Archived from the original on 2012-11-03. Retrieved 2022-10-17.
  3. 1 2 Weber, Bruce (15 August 2008). "Henry B. R. Brown, Who Opened Money Markets to Masses, Dies at 82 - Obituary (Obit) - NYTimes.com". The New York Times. Retrieved 2022-10-17.
  4. "Ph.D. under Geoffrey Hinton". goldmansachs.com. 2023-09-11.
  5. "Name: Hamburg, Margaret". allgov.com.
  6. "Margaret Hamburg's House, Washington, D.C." virtualglobetrotting.com. 17 May 2012.
  7. "Foundations Are Sending More Dollars to Donor-Advised Funds, Chronicle Analysis Finds". The Chronicle of Philanthropy. 2020-10-13. Retrieved 2022-10-17.
  8. Roberts, Andrea Suozzo, Ken Schwencke, Mike Tigas, Sisi Wei, Alec Glassford, Brandon (2013-05-09). "The Quetzal Trust - Nonprofit Explorer". ProPublica. Retrieved 2022-10-17.{{cite web}}: CS1 maint: multiple names: authors list (link)
  9. 1 2 Zuckerman, Gregory (2019). The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution. Penguin/Portfolio. p. 173. ISBN   978-0-7352-1798-0; hbk, 1st edition{{cite book}}: CS1 maint: postscript (link)
  10. "Patents by Inventor Peter Fitzhugh Brown". Justia Patents.
  11. The Man Who Solved the Market. pp. 173–174.
  12. Brown, Peter F.; Pietra, Vincent J. Della; Pietra, Stephen A. Della; Mercer, Robert L. (1993-06-01). "The mathematics of statistical machine translation: parameter estimation". Comput. Linguist. 19 (2): 263–311. ISSN   0891-2017.
  13. 1 2 A conversation with Renaissance Technologies CEO Peter Brown (September 11, 2023)
  14. The Man Who Solved the Market. p. 177.
  15. The Man Who Solved the Market. p. 178.
  16. Burton, Katherine. "Inside a moneymaking machine like no other." Bloomberg Markets, November 21 (2016): 2016.
  17. The Man Who Solved the Market. p. 180.
  18. The Man Who Solved the Market. pp. 181–182.
  19. The Man Who Solved the Market. pp. 189–190.
  20. The Man Who Solved the Market. pp. 193–195.
  21. The Man Who Solved the Market. p. 201.
  22. The Man Who Solved the Market. p. 205.
  23. The Man Who Solved the Market. p. 206.
  24. The Man Who Solved the Market. p. 230.
  25. The Man Who Solved the Market. p. 265.
  26. Goldstein, Matthew; Kelly, Kate; Confessore, Nicholas (2017-11-02). "Robert Mercer, Bannon Patron, Is Leaving Helm of $50 Billion Hedge Fund". The New York Times. ISSN   0362-4331.
  27. "White's Ferry | Poolesville, MD - Official Website". www.poolesvillemd.gov. Retrieved 2024-08-20.
  28. Szabo, Patrick (2020-03-24). "Whites Ferry Still a Vital Virginia-Maryland Connector After 2 Centuries". LoudounNow.com. Retrieved 2024-08-20.
  29. ABC7 (2020-12-28). "Historic White's Ferry, the last remaining ferry across Potomac River, shuts down service". WJLA. Retrieved 2022-10-17.{{cite web}}: CS1 maint: numeric names: authors list (link)
  30. 1 2 Davis, Rande (March 18, 2022). "A New Solution to Reopening White's Ferry?" (PDF). The Monocacy Monocle. pp. 1, 14. Retrieved October 17, 2022.
  31. GOODENOW, EVAN (4 January 2023). "Failure to launch: White's Ferry service resumption sought two years after ending". LoudounTimes.com. Retrieved 2023-01-25.