Jim Simons’ Son Positioned to Takeover Renaissance Technologies as Major IRS Dispute Looms
Posted on 01/27/2020
Nathaniel Simons, son of James “Jim” Simons, was named Co-Chairman of quant hedge fund Renaissance Technologies LLC in November 2019. Nathaniel Simons has been vice chairman of the hedge fund, while also working as a Senior Managing Director at San Francisco-based Meritage Group LP. Jim Simons retired from daily operations at Renaissance in 2020. Simons retained the title of non-executive chairman. Renaissance’s flagship Medallion Fund is open to hedge fund employees and family members of Simons.
Tax Issues
Renaissance Technologies is in a lengthy legal dispute with the U.S. Internal Revenue Service (IRS) over possible back taxes owed to the tune of US$ 6.8 billion. The IRS Office of Appeals rejected the hedge fund’s tax-avoidance maneuver involving so-called basket options. This is an estimate calculated by U.S. Senate investigators. Did the basket options have business purposes beyond tax savings? During the late 1990s and early 2000s, Deutsche Bank sold basket options to a number of hedge funds. Deutsche Bank eventually stopped selling the basket options after the IRS in a 2010 memo considered them an abusive measure.
