I've read this story about where part of Renaissance Technologies's alpha is coming from: buying and selling individual financial instruments entails paying taxes on the gains of each trade. It's more lucrative to buy and hold a well-performing fund. So allegedly RT advises such a fund what to buy and sell and simply holds it - such that it would only pay taxes once it sells. I'm not working in finance and can't make an informed comment but if true, tax optimisation would be a big part of the success.