Renaissance Technologies

History

2021: Renaissance Technologies top managers to pay $7 billion in underpaid taxes

  In early September 2021, it became known that the heads of the Renaissance Technologies hedge fund would personally pay $7 billion in taxes and fines to resolve a long-standing dispute with the US Tax Office.   Jim Simons, a mathematician and former Cold War code cracker who founded the fund about four decades ago, will pay another $670 million, according to a letter the group sent to investors.

Top managers of investment giant Renaissance Technologies will pay $7 billion in underpaid taxes

  The settlement ended a long-standing dispute over transactions made by the company's Medallion fund between 2005 and 2015, when several of the company's executives converted short-term capital gains into long-term profits, which are taxed at a significantly lower rate.   Renaissance also ranked Robert Mercer as its top executives, who funded the far-right Breitbart news site and supported several Republican political candidates, including former US President Donald Trump.  

The Renaissance Board of Directors has concluded that the interests of our investors for the relevant period will be best met if we agree to this decision with the Internal Revenue Service, and will not risk a worse outcome, including tougher conditions and fines that can be obtained as a result of the litigation, said Renaissance Executive Director Peter Brown.

  The US Senate Permanent Subcommittee on Investigations accused Renaissance in 2014 of shifting short-term transactions to options on a basket of securities, which allowed the hedge fund to pay income tax at a rate of 20%, instead of the 39%.   Renaissance is one of the most successful hedge funds in the world. The group pioneered quantitative investment - a strategy that uses complex computer models to make quick trade decisions. Medallion was a special tool, bringing billions of dollars to its elite sponsors.^[1]

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