Anyone who works for a hedge fund will have their own company that will get paid thier bonus. Companies have two nice traits.
1) Their end of year can be any month
2) They have a lower tax rate than most high net-worth individuals do.
So consider 2 fictional employee's.
The first one gets paid a bonus of $500,000 at the end of the year(2014). His tax rate is 40% so he ends up with $300,000. He reinvests the $300,00 at his hedge fund that returns 20% in the year 2015. As of December 31st 2015 he has a net-worth of $360,000.
Individual 2 gets the same $500,000 bonus at the end of 2014 but she has a company that gets the bonus. Now the companies year end is November so the tax year on on that bonus isn't until November 2015.
That hedge fund also returns 20% so as of December 2015 she has $600,000 ($500,000 * 1.2) and then owes tax of $120,00 (the corporate tax rate is 20% on her $500,000 bonus) so she ends up with $480,000.
Now when she pulls the money out of her corporation to spend she'll have to pay the dividend tax rate of %20. But she can let this money ride tax sheltered for any number of years.
To recap, she essentially shelters her money in two ways:
1) her bonus is sheltered for 1 year from taxes allowing the full amount to grow
2) she pays the corporate rate at the end of the year allowing her to hang onto an additional %20 until she pulls it out for her own use.
Any one can do this, the only preconditions you need to make it worth while are
1) a large bonus
2) a way to make the bonus money grow at a decent rate.
Among Doctors, lawyers, etc this is a common practice.
Now if you want t up the ante, you move your hedge fund to the Cayman Islands where you don't pay any tax on the gains until you repatriate the money back to the North America.
When Renaissance Technologies finally has a tell all book written about then, their brilliance will be acknowledged but I'm going to guess that a very large portion of their returns comes from not paying tax.
See: http://www.bloomberg.com/politics/articles/2015-07-08/irs-mo...
people worry about paying fees as a drag on their retirement earnings but paying tax is the single largest drag on creating wealth that the wealthy have. The above corporation sheltering is legal well tested under law and used in a very pervasive manner in the North American and the UK, I don't know anything about the rest of Europe but I'd imagine its the same.