James Simons, a mathematics professor who became one of the best paid hedge fund managers in the world, is retiring as chief executive of his Renaissance Technologies firm on Jan 1, a person briefed in the matter said.

Simons has been extraordinarily successful at generating mathematical algorithms to predict stock movements, but in recent years, his funds' performance weakened as the broader market declined.

The $5.5 billion Renaissance Institutional Equities Fund is down about 9 percent for the year, and fell 16 percent last year. The $2.5 billion Renaissance Institutional Futures Fund is up about 1.6 percent this year, but fell 9 percent last year.

Simons' departure is not performance related, the person said.

The 71-year-old's retirement has been long-rumored. Simons will remain as a nonexecutive chairman, and will keep his money in the funds, the person said.

Current co-Presidents Bob Mercer and Peter Brown will become co-CEOs in January, the person said.

Simons plans to focus on charity work when he retires, the person said. Renaissance, which manages about $17 billion of assets, declined to comment.

(Reporting by Dan Wilchins, editing by Leslie Gevirtz)