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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerJames Simons is the richest math teacher you've never heard of. Last year he earned $1.7 billion (a fact that was reported in the media in 2007) as head of Renaissance Technologies, a hedge fund compound from which he takes enormous fees.
How enormous? Simons earns 5% of assets under management and 44% of profits. Typical hedge funds managers earn 2% management fees and 20% of the profits. How does Simons justify the fees? He beats the competition regularly. In 2006, his $6 billion Medallion fund posted gross returns of 84%; 44% after fees.
Simons's annual pay checks have been adding up nicely for him. His net worth was recently estimated at $5.5 billion. Not bad for a math teacher.
Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.
Be sure to check out more Money Winners of 2007.
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