Combined effect of taxes and fees on Jim Simons’ realized returns

Determine how the combined effects of taxation and the Medallion fund’s fee structure alter Jim Simons’ realized returns from his investment in the Medallion fund.

Background

The paper investigates how to correctly estimate compounded returns for the Medallion fund and proposes approaches based on fund sizes, trading profits, and the manager’s net wealth. When using Jim Simons’ net wealth as a proxy for compounded returns, the authors note that taxes and the fund’s fee structure affect the relationship between Simons’ personal returns and the fund’s reported returns.

Despite presenting a hypothetical illustration of how fees might inflate Simons’ returns relative to the fund’s net returns, the authors explicitly state that the combined effect of taxes and fees on Simons’ realized returns remains unclear, leaving a concrete unresolved question about quantifying this combined impact.